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Technology Stocks : The Learning Company (TLC)
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To: paul richards who wrote (6281)3/26/1999 4:19:00 PM
From: Trader Dave  Read Replies (1) of 6318
 
Actually paulie, on an accounting basis, the reversal of the mindscape one time charge INCREASED earnings last year. It increases amortization going forward and will reduce earnings going forward by almost $0.01 per share per year for mattel. (Immaterial as expected.)

It would have been $0.01 per quarter for tlc stand alone, but their business momentum would have more than offset those non-cash charges as evidenced by the results that beat estimates by $0.05 in the december quarter.

I don't disagree with you on mattel.

For that matter, I also agree that management motivation at TLC is (was) WILDLY out of line with the shareholders. Perik and Oleary exercise their options on change of control and control relatively unrestricted mattel stock on the deal closing. This transaction was clearly in their short term interests and resulted in the massive dumping of TLC stock by long term institutional shareholders.

There's nearly a 100% certainty the deal goes through since so much stock is in the arb hands. It would be a vastly different story if the vote were as of the announcement date.

Don't underestimate the tricks mattel has prepared to try to goose their stock higher to push the ratio below 1.2. though.

It was fun jousting with you.

TD
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