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 : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Sector Investor who wrote (8433)	4/27/1998 11:21:00 PM
From: ekimaa	Respond to of 42804

RE: Xyplex purchase and the warrants involved--- The Internal Revenue Service is doing its part to egg on corporate mergers with a move that could trigger a substantial increase in stock warrants available to investors. Bob Willens, who patrols the tax code for Lehman Brothers, points out that the IRS has -- of its own accord -- decided to change the longstanding tax treatment of warrants that are used as part of payment for an acquisition. While a merger using at least 40% stock as payment has always been considered a tax-free exchange, warrants couldn't change hands on a tax-free basis as part of a deal. This position has been "roundly criticized" for much of the 60 years since it was assumed by the IRS, Willens says, but the agency always stubbornly ignored the complaints -- until its recent unprompted decision to reverse the rule. As a result, the inclusion of warrants on an acquirer's stock in a merger package is likely to gain rapid popularity. One major advantage is that warrants aren't included in calculating diluted earnings per share, unless they are in the money. This will allow acquirers to better convince their prey of the potential bottom-line advantages of combining, a key point at a time when the degree of dilution or accretion in a proposed marriage can make or break a deal. Warrants would also bind the target company's shareholders to the fortunes of the merged entity. Willens notes that the IRS withheld some goodies from the taxpaying community: Warrants won't be considered tax free if the coveted "pooling of interests" accounting treatment is sought. But because the alternative, "purchase accounting," has as its chief drawback the depression of EPS, the warrants' value in these deals is enhanced even more.------ Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved Mike

To: Sector Investor who wrote (8433)	4/27/1998 11:49:00 PM
From: Regis McConnell	Read Replies (1) \| Respond to of 42804

Sector,I believe the comment was that they have "shipped in volume" a WDM for voice/data/cable. I don't know if he stated that they had shipped 500,000, as the reference was to there being 500,000 subscriber lines installed, which is 2x the installed adsl. I think that the instalation sales partner is RealTec, & the cost was stated as being very competitive w/copper at $1000-1200 per subscriber. Regis