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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: kash johal who wrote (115358)	6/10/2000 8:56:00 PM
From: Gopher Broke	Respond to of 1571800

How about if company A sells some of their holding in company B each quarter to patch up their bottom line (a bit like Intel is doing right now). When it runs out they go bust and your long position becomes worthless. Meanwhile, company B, who's share price has been held flat by continual sale of company A's holding, skyrockets and the shorts all get squeezed out. Hey, you wanted to hear the alternative scenario :^)

To: kash johal who wrote (115358)	6/10/2000 9:02:00 PM
From: Gopher Broke	Respond to of 1571800

Another company in this position is SGI. I picked up 20K at $7 when they announced that they would hand out 0.13 MIPS shares per SGI share. The MIPS handout is currently worth $5 per SGI share and I am bullish on MIPS so it seemed like an easy way to get SGI "for free". (I can't really see SGI dropping to $2 after June 20th, the ex-dividend date.)

To: kash johal who wrote (115358)	6/10/2000 9:20:00 PM
From: tejek	Respond to of 1571800

What am i missing here is this not a once in a lifetime opportunity <VBG> ??? Welcome comments from everybody. Kash, Well, lets see what we have here. Company A and Company B are both losing boatloads of money. Company A was running up because another company was buying them out and it looks like Company B was also running up because of Company A's buyout because as soon as the buyout was off, Company's B stock fell as well....but lets say that it was coincidence. The other piece of this scenario that may be of importance is that the buy out fell out because of accounting issues wrt Company A. You may want to know more about what those issues are before buying more of Company A.....bad accounting can really make a stock suck wind. ted

To: kash johal who wrote (115358)	6/10/2000 9:24:00 PM
From: ptanner	Respond to of 1571800

kash, Re: "But seems to me that when company A owns equity in company B that is valued at 3x company A's valuation there is money to be made." This situation existing with SEG (Seagate) which owned a lot of VRTS (Veritas) and others which exceeded its own shareprice. I will look for my notes... some small square piece of paper in the pile :-) but the VRTS was the biggest of the holdings. IIRC, VRTS was also added to the S&P sometime in this period. Since then, there was a buyout of sorts as someone decided to pick up the excess value. SEG shareholders didn't seem to win in the deal as proposed but I have not followed it. Of course, the stock did bounce up nicely ($55 when I first learned of situation -> $75) after the initial announcement but since then has ben volatile (like the market) and is at $65. Older link to the situation: smartmoney.com "Anatomy of a Classic Value Play" By Michael Oneal PT