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Technology Stocks : Net2Phone Inc-(NTOP) -- Ignore unavailable to you. Want to Upgrade?

To: ratan lal who wrote (660)	8/29/1999 10:16:00 PM
From: jeffbas	Respond to of 1556

Ratan, I have decided myself that that is the only logical explanation as well. If IDTC were to distribute any significant amount of their shares, NTOP would get hammered. Therefore, I have concluded that IDTC is selling to reflect a valuation on NTOP consistent with longer term values, whereas NTOP sells to reflect short term supply and demand from traders. In normal situations, this would be gradually corrected by arbitrage as someone would be willing to short NTOP and buy IDTC. This would tend to drive up IDTC. However, I regard this as unlikely. The NTOP float is so small that no arbitrageur with half a brain would touch it with a 10 foot pole. Thus IDTC may tend to carry a considerable discount into the future. The one thing that would change this, in my opinion, is if larger investors were to decide that this was more than a trade and look to commit large amounts of long term money to the idea. The better long term investment is of course IDTC, not NTOP. In other words, the large discount can be viewed as an assessment by long term investors to stay away.