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Technology Stocks : ITURF Inc. ( NASDAQ:TURF ) -- Ignore unavailable to you. Want to Upgrade?

To: mact who wrote (226)	4/22/1999 8:39:00 PM
From: Jason Compson	Respond to of 614

mact, You have forgotten who owns and controls Delias: the Kahn family. If Delias sells TURF stock, Delias has the money, but what good exactly does that do the Kahn family? Delias will have to reinvest the money in its own business (i.e. not in TURF). Maybe Delias can use the money, maybe it cannot. I don't know. But in order to get that money out of Delias and into the hands of its shareholders, Delias would have to pay a dividend with all the unpleasant tax consequences that causes to our friends the Kahn family. Now, think how a distribution (tax-free of course because Delias and TURF are in the same consolidated group) of Delias stock would benefit the Kahn family. Now they own shares of Delias which the market values at $20/share. If Delias distributes the TURF stock to its shareholders, then they have a share of Delias (ex-TURF) and .88 shares of TURF. At current market prices, that is worth, I figure, about $37/share. They let the public (i.e. Delia*s shareholders) in on the deal because it is in their (the Kahn's) best interests to do so. Of course, they might like to capture all the "free money" for themselves but there is no way to do so. They have to share it with their fellow stockholders. As I've said before, it doesn't get any better than this.