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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (13958)	2/19/2002 1:53:03 AM
From: blankmind	Respond to of 78567

Madharry, Tcyo just said last week that they may not split up after all - as they initally were going to to unleash shareholder value - but now the CEO said last week on the confer call that maybe they'll wait b/c timing is right - which makes sense to me but drove price down further - by the way - I love accounting & GAAP - used to teach it even - but as you correctly point out on leases - there's so many variables - then combine it with the acquisitions & stramlining - & it's very hard to use GAAP with Tyco - & this is one reason for the CEO saying he wants to split up the company - so each can be better reviewed

To: Madharry who wrote (13958)	2/19/2002 11:21:31 AM
From: Bob Rudd	Read Replies (1) \| Respond to of 78567

<<I also question why after being a successful conglomerate for many years management decided to split into separate companies. Do you understand why?>>Because the market wasn't giving them credit for earnings performance. They felt [were convinced by IB's] that separate focused entities of sufficient size, financial and market strength [#1, 2, or 3 in respective sectors] but with simpler more transparent financials would garner more respect in the market. I agree. GE is an anomaly. Most conglomerates have eventually failed to add value. One reason the market gives them sub-par multiples is that the holder that will pay top $ for the finance unit won't pay top $ for the electronics unit and so forth. OTOH with focused units the top bidders for each set the price. The concept of a 'mini-GE' went over for awhile, but what investors demand now is transparency, simplicity...something investors and analysts can get their arms around. With so many managements sticking their heads in the sand and ignoring opportunities to realize shareholder value, I applaud Tyco management for agressively persuing it. I also admire their willingness to change strategy when the market changed and what they were doing wasn't working. If there were serious uglies hiding in their operations, would they expose these in the expanded disclosure process that IPO's and/or external purchasers require?