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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: DM who wrote (3022)	1/2/1999 11:51:00 AM
From: melinda abplanalp	Respond to of 56535

DM-Good question. Also I would like to know how owning the parent company helps you with the IPO? Do You get free shares of the IPO because you own the parent or does that make give you a special privledge to buy the shares. Also if you have a discount broker can you still buy the shares. I thought only the full service brokers carries IPO shares. Any help with this would be appreciated. Melinda

To: DM who wrote (3022)	1/2/1999 12:41:00 PM
From: Cookie Monster	Respond to of 56535

RE: Companies Launching An IPO (DM) The value of a company, such as NAVR, launching an IPO is in the fact that the Parent company usually still ownes a large chunk of the stock in their new spinoff. Just as MALL owned a large chunk of UBID. When the new Internet IPO spinoff takes off and runs to obscene prices, the parent company is all of a sudden worth a lot more money. Later, CM

To: DM who wrote (3022)	1/2/1999 4:48:00 PM
From: Poet	Read Replies (1) \| Respond to of 56535

Hi DM and Melinda, Cookie Monster gave you as short and clear an answer as I can give to the question of valuations of parent companies spinning off IPO's. This is where my psychological training serves me well: essentially, people believe in the "halo effect", than when something good happens to one thing, the effect of the good spreads to the things near it, in this case, the parent company. This is why you'll see in daytraders' rooms when a particular company is spiking, an experienced trader will often call another company which is in the same business and that will spike as well. This is a psychological trading play more than one based on news or fundamentals, but a legitimate play nonetheless. Poet

To: DM who wrote (3022)	1/2/1999 5:57:00 PM
From: Wes Stevens	Respond to of 56535

In the case of DBCC they now own 50% of marketwatch with CBS owning the other 50%. After the IPO they will own 38%. If the IPO goes through the roof the 38% they still own will make DBCC worth a lot more. Same with navr, they own 100% of netradio and will own 80% after the ipo. When you think of it it really makes no sense. If marketwatch is really that valuable then DBCC should be worth more before the ipo then after. But such is life and the internuts.