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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Ben Graham who wrote (6556)	11/6/1997 5:03:00 PM
From: Pancho Villa	Respond to of 9285

Ben, Thanks a million for your reply this rascals may be trying to do exactly what you are saying. I am concerned. If you have down you homework well, as your clever observation seems to indicate, then you know that at IPIC, IMO, investment banking appears to be of greater caliper than science. My only question is whether, given the circumstances here, IPIC can get rid of this asset (i.e., the intercardia shares) legally? Couldn't it be argued that this is a way of cheating people that may win in court out of their money? In theory, they could even declare a cash dividend! Of course this would probably be clearly on the "nono" side. The stock dividend is more in the gray area. Please let me know the outcome of your research. looks like to remain short which I want we will have to start talking to lawyers and bankers. I will ask Cramer at thestreet.com what he thinks since he is both! One him for sure him and Barron's may have interesting comments to make on this one. Regards, Pancho I

To: Ben Graham who wrote (6556)	11/6/1997 5:49:00 PM
From: Sid Turtlman	Read Replies (1) \| Respond to of 9285

Ben: I'm a new lurker on this thread (an excellent one - kudo's to all!) and really know nothing about IPIC or Intercardia, but I can suggest you not to worry about that scenario too much. If that sort of thing were possible, the tobacco companies would have done it a long time ago and left their liabilities in an empty shell. Any assets transfered to other corporate entities, or paid out in extraordinary dividends, or even cash bonuses to major employees, done with the purpose of screwing the creditors, would be grabbed by the bankruptcy court and turned over to the creditors. However, I have seen companies do spinoffs for the purpose of creating a short squeeze; those spinoffs usually have few assets of any value - all the company is trying to do, in that case, is make life miserable for the shorts by creating a hard to borrow security that they may be forced to cover at an excessive price. Perhaps there is a risk of that here, at most. But a company can't just bundle up its liabilities in a leaky rowboat, send it out to sea, and watch it sink, while management and shareholders sail off in their yacht. The courts won't let them.

To: Ben Graham who wrote (6556)	11/6/1997 10:27:00 PM
From: Pancho Villa	Respond to of 9285

Ben, >> Do you have any thoughts on what Intercardia might be worth in this scenario?<< I just realized I answered your question with a zillion new questions! I was in my way out and could not fully digest your point. I have not looked at intercardia carefully but IMO there is nothing hot going on in any of the IPIC subsidiaries. I see much bettter long opportunities in biotech and elsewhere. If your scenario indeed develops we need to assess both the up and down side: The down side: we need to wait for details on the transaction (i.e., how many Intercardia shares IPIC gets to then calculate the stock dividen per share of IPIC that would result. This way we can get a $ value of the stock dividend. Notice that an additional thing to consider is that the dividend announcement may also increase the price of IPIC shares but the up side below will probably be much more significant factor. The up side: If the market is smart (IMO it has not shown much brains on this one!) it should read this manuver as a clear indication that IPIC sees a big cloud in its short future and the shares my accelerate their price erosion. If the up side scenario develops before the stock goes ex-dividend we could still cover at a nice profit. However, I admit that investment banking manuvers may create risks I had not considered. Still, I remain strongly long term short. Regards, Pancho