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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Barbara Bullard who wrote (637)	8/19/1998 2:53:00 PM
From: Sal Pugliese	Respond to of 14638

Hi Barbara. If I'm not mistaken, Nortel still holds a large % of Entrust. Therefore, given that, it will just increases the financial value of Nortel. Sal

To: Barbara Bullard who wrote (637)	8/19/1998 6:06:00 PM
From: Harry Sharp	Respond to of 14638

Companies typically spin-off about 20% as an IPO and retain 80% of the company. There is little effect on the parent company initially as they no longer have that 20% but instead have the money raised by the IPO - basically a wash. Over time if the IPO'd company gets treated well in the market the parent company should go up because they still own 80%. If the company later decides to spin-off the remaining 80% those shares are distributed to existing share holders of the parent.