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Technology Stocks : Midway Games - MWY -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (232)	5/11/1999 1:58:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 278

I just spoke with VP Finance. The deal re: takeovers follows: The distribution of MWY from WMS was tax-free. There are both pre-spinoff and post-spinoff requirements to keep this tax free. One of the reqs is that there has been no preconceived plan for a takeover of the spinoff by another company. If such a takeover occurs within the first 2 years of the spin-off, then the IRS presumes that there was a preconceived plan to spin the company off, in effect, to another company. If a takeover does occur within two years, then it is up to the involved parties and the initial parent to prove to the IRS that the transaction was in no possible way preconceived. The IRS is the ultimate arbiter, but it usually takes the <2 years rule of thumb as, indeed, a rule. Hey, I'm long, a proud shareholder. Far be it from me to squash a rally evidently induced by takeover talk. But let's not let irrational exuberance cloud our perception of the facts. And let me be clear that I never discussed anything other than the technicalities of a takeover with the VP. Mike