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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: KailuaBoy who wrote (17387)	12/1/1999 2:43:00 PM
From: GraceZ	Read Replies (3) \| Respond to of 29970

As I understand it once the tracking stock is issued it can't be spun off for 3 years. Unlikely to be spun off because of the tax consequences. Most would assume that a company does a tracking stock in order to unlock value in assets that are fundamentally different from the parent company. In most cases the expectation is that the tracking stock will rise in value. Suppose you needed to spin off a division to protect the parent company, but because of the tax consequences arising from the original merger, you can't. Does it make sense to issue the tracking stock to isolate that part of the business? Perhaps. If the value of the tracking stock flounders, are the tax considerations still a block to spinning off? We don't know, one would speculate that the tax problem goes away when there is a significant drop in value. If this is the case you have to start considering that the tracking stock might in fact be a tourniquet applied prior to amputation. I'm not saying that this is the case, but that this may be the case. I don't think that we should just take it at face value and swallow the company PR whole.