Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : DaisyTek (DZTK) Nasdaq -- Ignore unavailable to you. Want to Upgrade?

To: EACarl who wrote (12)	11/26/1999 1:02:00 AM
From: Glenn Petersen	Respond to of 19

DZTK may certainly pop a couple of more points prior to the PFSW IPO. The 45% is a bit arbitrary, though most of the back door plays end up with a 40% to 50% discount. This should also be the case with back door plays where the parent intends to spin off the remainder of the sub. I would suggest that there will be a significant short term discount due to general market uncertainty and the uncertainty associated with the IRS approval process. Actual post-IPO spin offs in the Internet sector are a relatively new phenomenon and the only substantive post-IPO Internet spin off that comes to mind is MALL's spin off of UBID. UBID completed its IPO on December 9, 1998. MALL announced that they had gotten IRS approval in early May 1999, set the record date for the distribution of the UBID shares for May 24, 1999 and did the actual distribution on June 8, 1999. The MALL shareholders received .70488 shares of UBID for each MALL share. After the distribution, MALL initially traded at $8 per share. There was a significant uncertainty until IRS approval was obtained. It may be that future discounts will be less because investors will have the example of UBID/MALL. Closing Closing Closing UBID Price Closing Price Month Price Times Price MALL End UBID .70488 MALL less $8 Discount(1) 12/98 106 5/8 75.16 31 3/4 23 3/4 68.40% 1/99 81 1/2 57.45 35 13/16 27 13/16 51.59 2/99 72 3/8 51.02 32 5/8 24 5/8 51.73 3/99 62 1/4 43.88 30 1/8 22 1/8 49.42 4/99 56 39.47 34 5/8 26 5/8 32.54 5/99 33 9/16 23.66 30 1/4 22 1/4 5.96 (1) 1 minus (Adjusted closing price of MALL divided by value of UBID shares ultimately distributed to the MALL shareholders; i.e, for 12/98, 1 minus 23.75/75.16)