Conference nyoss1::market_investing

	You can't own more than 5% of a given company without having
	filed with the SEC.

     ...and there are all kinds of knots with which different folks
     can tie you up once you go over 5 or 10 percent ownership.
     That's why most mutual funds avoid exceeding that percentage
     in any particular company (and, hence, why big cap stocks
     are so popular with the funds).
    

    ... and if you started buying in the open market the price would soon
    rise far above what you wanted to pay once word got out you were
    buying. (As it would, once you bought more than 5%)
    
    AND THEN, with your fists full of stock, suppose the U.S. "Justice"
    department decided you weren't allowed to complete the deal, as
    happened in The Intuit Affair. You'd be forced to sell the stock you
    had bought at a likely loss. Can you imagine what would happen to
    Intuit's price once word got out that Microsoft had to sell 20 million
    shares? A stampede for the exits, that's what.
    
    With a tender offer you don't have any such worries. Either you get
    what you want at your price, or you're off the hook at relatively
    little expense.
    
      John

>     With a tender offer you don't have any such worries. Either you get
>     what you want at your price, or you're off the hook at relatively
>     little expense.

	BTW, in a takeover, or specifically in this case, are they only
	after buying 51% of the outstanding shares in order to have
	the controlling interest?

>	BTW, in a takeover, or specifically in this case, are they only
>	after buying 51% of the outstanding shares in order to have
>	the controlling interest?
    
    It depends on the circumstances of the offer. A company may want to buy
    ALL the shares tendered, only 51% of the outstanding, or possibly
    somewhere in between. In the "51%" case a company will pro-rate all
    blocks tendered and buy the same fraction of every block. So you could
    tender 1000 shares and end up selling 762, retaining the 238 unbought.
    
    I would not want to hold stock in a company that's >51% controlled by
    anybody except me. No chance to throw the bums out.
    
      John

> It depends on the circumstances of the offer. A company may want to buy
> ALL the shares tendered, .....

	What if some shareholders try to hold out?  I assume they
	aren't allowed to hold out, that the shares no longer
	trade, and checks are mailed out to all the shareholders
	of record?

    
    I have a very basic question about this take over.
    If I own say 100 shares of Lotus stock, what happens now?
    Do I get the equivalent in IBM shares? Is Lotus Stock still trading?
    
    Doug

    
    Here is probably stupid question:
    
    Since IBM bought Lotus, WHY didn't they just buy out Microsoft with
    there nearly 11 billion of cash on hand!   
    
    Microsoft has only 4.5 billion in sales.
    
    Anybody know why Microsoft wasn't the target of IBM instead of Lotus ?
    
    

Well, Microsoft has on the order of 625M shares outstanding (per 
the 10-Q for 4QCY94).  At current prices of about $90/share, 
Microsoft's market capitalization is approximately $56B.

Pretty tough to get even a controlling interest for $11B. To take
over a company, you buy its stock.  Sales doesn't (really) enter
into the transaction. 

Wes

    I read that the valuation of Microsoft was within $1 billion of IBM
    today.
    
    michael

Yep. IBM has about 585M shares @ $97/share.  About $56.7B market 
cap.

And for completeness sake, Digital has 144M shares @ $44.50/share 
for a market cap of $6.4B.  Now, IBM could have bought Digital 
for cash.

    re: .12
    
    Maybe not. Lotus was around $30. IBM offered about double that. Don't
    know if this would be the case for Digital too.
    
    michael

    So, who else has ~$6-20B in cash to buy us?  Why limit the field to
    IBM?
    
    Mark

    
    	Anybody offers me $80/share for my Digital stock and it's theirs.
    On the other hand.....
    
    
    		the Greyhawk

    ...and for quite a while last year, Microsoft's market capatilization
    was actually higher than IBM's.  IBM has since zoomed from 40ish to
    90ish and that's no longer true.

	Doesn't Bill Gates still own a majority of the stock?  If so,
	wouldn't that make it impossible to be taken over unless Gates
	goes along?

Per the 1994 proxy statement, Gates held almost 25% of the stock. 
Paul Allen held 9.9%, Steve Ballmer 5.2%