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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: killybegs who wrote (11256)	9/23/1999 10:56:00 PM
From: Carl R.	Read Replies (1) \| Respond to of 17679

When I said that the holding company would be empty I was obviously exaggerating. Clearly if you start with at negative book value and transfer out assets the picture gets even worse. In the past Ampex was not all that financially healthy, and by the time of such an IPO their cash will be severely depleted. Paying the interest on those junk bonds will be more difficult without interest income from owning other junk bonds, which is what they did in the past with their cash. The net interest expense would go up dramatically. In my opinion earnings would be closer to $.10-15 if they did what you suggested. You said "Unless specifically restricted in the bond covenants, and I did not see such restriction, iNextv can be spun off, no problem. " I believe that a spin-off would be considered a dividend. I am pretty sure that the bond covenant and/or the redeemable covenants would prohibit a dividend. As an alternative suggestion, Ampex could distribute rights to purchase shares at the IPO price. I believe that this is how Safeguard Scientific does it. That, as I suggested, causes people to want to own the holding company in anticipation of the next IPO, and I think causes them to sell at a premium to the securities they own, rather than as a closed end fund trading at a discount. Carl