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.

Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: DMaA who wrote (375)	11/11/1997 5:28:00 PM
From: DMaA	Read Replies (1) \| Respond to of 22640

I did some searching and found this from Bank of New York: What are Depositary Receipts ? A Depositary Receipt is a negotiable certificate that usually represents a company's publicly traded equity or debt. Depositary Receipts are created when a broker purchases the company's shares on the home stock market and delivers those to the depositary's local custodian bank, which then instructs the depositary bank, such as The Bank of New York, to issue Depositary Receipts. Depositary Receipts may trade freely, just like any other security, either on an exchange or in the over-the-counter market and can be used to raise capital. Well this isn't publicly traded in Brazil, so where do the shares come from?

To: DMaA who wrote (375)	11/12/1997 12:37:00 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Hi David, you raise some good questions. I don't know a lot about ADR's either except that my PaineWebber broker indicated they were traded just like stock. I guess I assumed from his statements that they are somehow guaranteed. I'm assuming that taxes are handled as if it were a US stock. I've only been trading this ADR a couple of months and have never been involved with them before. This is wildest stock I know at the moment. >>If and when they take TBR public, do they call back those shares in the bank valt and sell them leaving the ADR holder with.....what? Or do holders of the ADR get shares in the company 1 to 1? << It is my understanding that shares will be issued in all the new companies (13?) created. One of the anxiously details yet to be disclosed is how these shares will be distributed. Somewhere along the way I remember Brazil commenting that the little guys wouldn't get screwed in the deal. It seems to be a complex problem, but ADR holders are supposed to get stock I believe. I own the stock, but also trade options and as of yet have been caught off guard by anything specific to an ADR. The options are traded on American exchanges so I would expect no surprises other than volatility. Splitting the options as the company splits will be real interesting. May be some opportunity here, but as we get closer everybody will be looking for the details. sf