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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: TRIIBoy who wrote (11968)	11/7/1999 11:27:00 PM
From: umbro	Read Replies (1) \| Respond to of 18998

The reason is liquidity. After the split that changes. I won't argue that this BELFA (or BELFB) isn't a decent value play, but I don't see how the liquidity argument holds, unless someone who currently owns the shares sells them. A likely scenario, is that the BELFA (voting) shareholders sell their BELFB dividend shares once they are delivered, and turn around and buy back BELFA shares, further tightening their hold on the voting shares. The 1% div. on the BELFB is a nice tribute, but hardly enough for anyone to get excited over. If the BELFB discount has decreased by then, all the better for the BELFA shareholders. The idea that increasing the number of B shares outstanding somehow makes it easier to acquire other companies doesn't make sense. This is a stock split after all, so the net capitalization of the company hasn't changed. Looks to me, more like the B shareholders will have been effectively diluted by 30%, post split. I don't think the stock will jump much, if at all on this news. METHA, a similar company, at similar valuations looks like a safer bet.