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Technology Stocks : CCGI: ComTech Consolidated -- Ignore unavailable to you. Want to Upgrade?

To: DuGen who wrote (260)	2/18/1999 1:18:00 AM
From: Joe Bilich	Read Replies (1) \| Respond to of 394

Interesting news release. Are the companies really worth a dollar each per share? That sounds pretty optomistic--even allowing for a "holding company discount" being eliminated. As to your other questions, the release makes it pretty clear that CCGI shareholders will NOT be getting shares in the new companies directly, but will instead get cash dividends as CCGI liquidates its holdings. This presumes the IPOs are sucessful and that there is an on-going market for CCGI's holdings, which remains to be seen. But clearly the business model is for CCGI to hold shares in the newly public entities, and not spin off those shares to us. I think this is preferable by far, as the alternative is to likely end up with wierd small lot holdings in potentially illiquid companies on which Reg D financing is outstanding. I'd rather have cash. My specific questions are: --what leads them to believe they can get the IPOs done by June? do they already have underwriters lined up and indications of interest? --what does the proposed capital structure for each of the entities look like (CCGI position vs. Reg D shares) --how can they (my paraphrase) "issue Reg D shares without dilution to CCGI"? This sounds like smoke and mirrors to me--if you issue shares, there IS dilution. --what do the pro-forma financials of the new entities look like? In other words, why should anyone take down those IPOs and nurture them in the marketplace? --assuming they proceed with these spin-offs, what then is the business focus of what is left as CCGI? What is the business plan for those operations? --what assumptions are they making when they indicate they plan to sell off the CCGI stakes in the new entities over time? Will they be working with or against the Reg D holders? How? --Assuming the best case--that the IPOs go off and the new stocks ultimately get listed and CCGI sells into an orderly market over time--how long does that take? If they truly bring in $1 per company--over what time period? What is the NPV of the expected cash flows? There are a lot of questions to be answered, but I think they are going in the right direction by breaking up the conglomerate and allowing each business to develop a market presence and focus.