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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: taxman who wrote (26789)	7/19/1999 9:26:00 PM
From: codawg	Read Replies (2) \| Respond to of 74651

A tracking stock does not create a subsidiary, but it is tracked financially as if it were a separate subsidiary. Some piece of the tracked business will be sold to the public via the tracking stock IPO. Usually this is on the order of 15%-25%. The rest (75%-85%) will remain in MSFTs possession and MSFT shareholders will realize the value indirectly. They will not initially get stock in the new issue, but as the value of the publicly traded portion goes up, so will the value of the portion that MSFT owns and so MSFT stock will benefit. Should MSFT eventually decide to fully spin off the business, then some or all of MSFTs equity in this business would be given to MSFT shareholders.

To: taxman who wrote (26789)	7/19/1999 10:14:00 PM
From: t2	Read Replies (3) \| Respond to of 74651

taxman, What do you think about a August call buy (100s) early in the morning in the event of a stock price decline and selling by the afternoon or Wednesday/Thursday. As i don't have exposure to any short term options, i am thinking about this one. An open of 97 would make it very tempting for me. A flat to higher open---i will pass on it. Going for small play. What do you think about such a strategy. I feel confident it will work out as long as we get a price decline in the 1st half hour of trading. I am hoping for such a chance but i am starting to have my doubts.

To: taxman who wrote (26789)	7/20/1999 12:50:00 AM
From: Gerald Walls	Read Replies (1) \| Respond to of 74651

"tracking stock?" i don't know the answer but will take a guess. first microsoft will contribute its internet related assets to a newly formed wholly owned subsidiary. No, that would be real stock and not a tracking stock. A tracking stock is purely an accounting gimmick. Certain assets, like Hughes or EDS, are accounted for as if they were a separate company and a stock is issued that supposedly reflects the performance of those assets, like GM Class H and GM Class E stock respectively. However, there is no separate control or board of directors, no legal separation of income/expenses, no separation of liability, and the owners of the tracking stock have no real claim to the tracked assets. But, hell, as long as no one cares and they buy it anyway... In the future, if MSFT were to decide to actually spin off the Internet assets, the tracking stock could be turned into a real company I guess.