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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: Rob Palmer who wrote (8601)5/20/1999 8:30:00 PM
From: WAI  Read Replies (2) | Respond to of 17679
 
Regarding IPOs: What about the issue of control? We've seen a consistent pattern with all of the subsidiaries. Buy 20% up front with an option for 50%. The 20% level keeps the financials off the books until they're pretty enough, whence the 50% option is exercised. I assume that the 50% level was chosen to have control. If then 10% of the entity was IPO'd, Ampex's ownership would drop to 45%, and Ed would theoretically at least, have lost control.

Anyone think this is an issue? Am I oversimplifying or misunderstanding anything?

Cheers,
William



To: Rob Palmer who wrote (8601)5/20/1999 9:14:00 PM
From: Thure Meyer  Read Replies (1) | Respond to of 17679
 
Rob,

A couple of things.

1. Yes IPO's can raise a lot of capital these days, and as long as Ampex doesn't give up control (and strategic vision) ok. However if the company is spun out, whatever cash flow they generate will no longer be at Ampex's disposal.

2. "Afterall, shareholder value is supposed to be the main focus of a publicly traded company, right?"

Yes and no. If you mean a fast buck, emphatically no. The primary responsibility of a company is survival and growth. My own preference would be for Ampex to grow until they can actually pay some dividends and so that I can use them as a long term core holding.

Of course if you are looking to get out with a profit and trade, then an IPO would be ideal. Just my opinion of course...

Thure



To: Rob Palmer who wrote (8601)5/20/1999 10:14:00 PM
From: HPilot  Read Replies (1) | Respond to of 17679
 
Rob and all:

The biggest tip off that AXC may be planning an IPO is that they have restructured into a holding company.

Another reason to go IPO would be to get those institutions converting their bonds to hold rather than selling whenever the stock goes above 5!


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