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.

Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Ned Land who wrote (3387)	12/29/1999 1:34:00 AM
From: Ned Land	Read Replies (1) \| Respond to of 24042

WRT my 3387 post, the CUSIP number issue is likely the culprit. I looked at my notes/records from 1997 when I traded ABX, both in Toronto and NY. The stock has/had? two different CUSIP numbers. From a capital structure point-of-view, it was the same security. But thepoint-of-view of a Toronto or NY firm's back office, they're apples and oranges. JDSU is likely the same thing.

To: Ned Land who wrote (3387)	12/29/1999 1:52:00 PM
From: David Graham	Read Replies (3) \| Respond to of 24042

RE: TSE & NASDAQ shares The shares traded on the TSE and on NAZ are different, and as you say, will have different CUSIPs. The TSE shares are actually JDS Uniphase Exchangeable Shares. Each one can be exchanged for a share of JDSU. They were set-up to accommodate Canadian shareholders of JDS Fitel when the merger took place. Canadians can't hold JDSU in the retirement plans because it is and American stock, so they set-up what is essentially a tracking stock and called them exchangeable shares. (This happens often with takeovers/mergers between Canadian and U.S. firms). The Exchangeable Shares are treated as Canadian property in retirement and institutional pension plans. What is happening is that MM's get to arbitrage between the TSE and NAZ. They buy the shares cheaply in Toronto (lower volume, wider bid/ask spreads) and sell them on NAZ. Technically they are short JDSU until they convert the Exchangeable Shares. This is a one-way process, meaning that Canadian shares can only be converted in JDSU, not the other way around. So every time a conversion takes place, more shares leave the Canadian marketplace. In the end, this is bad news for Canadian investors. As Exchangeable Shares disappear, volume will continue to thin out. The problem is that Canadian institutions will not be able to buy the stock in bulk in the future. Eventually the bid/ask could deteriorate to the point where retail investors won?t buy it either. Another result is that JDU's weighting on the TSE 300 keeps decreasing - a stock that does nothing but go up is actually losing weight in the Index, all because of the southbound exchange of shares. (I think there are occasional EDGAR filings relating to the conversion.) David