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Technology Stocks : Midway Games - MWY -- Ignore unavailable to you. Want to Upgrade?

To: Machaon who wrote (48)	5/21/1998 10:51:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 278

Bob, The proxy statement is the document for this kind of info. Per the Dec 97 proxy: "Midway believes that the price of its Common Stock has been adversely affected by Midway's relatively small public share float and by the substantial short position that exists in Midway stock attributable to arbitragers that have purchased WMS shares while establishing a short position in Midway. Therefore, Midway's desire to grow its business, in part through acquisitions, may be enhanced by the spin-off of Midway. In order to realize its acquisition strategies, Midway would have to either raise cash to fund a cash acquisition by borrowing or by selling additional shares of its Common Stock or other securities or issue additional shares of its Common Stock or other securities as the method of payment. Accordingly, the price and liquidity of Common Stock is an important consideration. Midway also believes that the spin-off will reduce regulatory burdens by separating ownership of Midway's business from WMS' gaming device business." Keep in mind that although MWY was spun off from WMS, MWY was the dominant part of the old company. The spinoff made sense from that point of view alone. Also, the head of WMS left WMS to head MWY. He owned 320,000 shares of MWY pre-split, got a bunch more in the split, and hasn't sold a share. In sum, the split makes sense to me. Now how many WMS gaming investors were not so keen on hanging on to a kiddie game company? I think we have our answer in the share price since the split. Bob, you seem contrarian-minded and interested in value. I'd love it if you'd join us on the value investing thread. Good Investing, Mike