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Technology Stocks : Creative Computers(MALL) -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth Yeh who wrote (419)	11/21/1998 9:24:00 PM
From: RockyBalboa	Respond to of 1634

Kenneth, you finally did not comment on the prediction that the prices between M and U will be even more tightly connected than in any other partial spin-off. Christian, MALL, with its $4.68 book value is worth $0 according to Tom...correct? So, that $24.75 per share MALL is really worth nothing. That entire value is based on UBID's potential IPO price? Who said MALL is worth 0? The only story is that, especially at high uBid prices, UBid is the most valuable part of MALL. And myself, I apply a formula of the sorts MALL = 0.72 * disc(UBID) + R, where R is MALL residual value of $7- $8 and disc a value of .70-.80 Tight connected does not mean to value the residual at 0, but at a certain, rather involatile value in absolute $ terms. In part, you contradicted yourself: Third, WCAP owned a minority stake in COOL. There was no benefit of the IPO on WCAP shareholders. The comparison does not hold with MALL and UBID since MALL plans to distribute UBID shares to its shareholders. And MALL owns 100% of UBID whereas WCAP owned a very small stake in COOL.. -WCAP COOL is in my eyes - "weak" as WCAP hold 18% and moreover, there is no distribution plan. So there are no commitments made of any sort. As a consequence WCAP trades at a hefty discount to COOL (Also, the discount is due to tax considerations). Still there was a benefit for WCAP shareholders. COOL value was assigned and a market was established for COOL. Disposing a small stake should be much more easy. Despite that, in short term WCAP/COOL was exaggerated and a nice short. MALL/uBID guided a tax free separation after 1/2 year, thus implying a much tighter connection. The only benefit for MALL shareholders thus is instead of having one stock, MALL, you have two then. Additionally and there's some sort of contradiction: As it is clear that that uBid will be spun off, thus handing the 4fold float to MALL shareholders and, based in MALL float almost tripling the uBID float immediately tradeable then (1.58-1,70 + 2.88) should lead in a certain but constant (less volatile) discount between mall and ubid. The effective shareholders benefit will be bits improved by passing the tax duty resulting from a Ubid sale but sure hampered by the relative vast ratio of shares released then. Now guess how much of that effect will be priced in today. The benefit for MALLs could be less, compared to WCAP therefore. C.