Forum Archive Index - September 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Mike,

I know you mentioned that if a company is bought out, the proceeds of 
the sale get get spread around the remaining shares you have in the 
competition.  But what happens with a cash issue?

1/Do you just sell the rights and treat that as a kind of special 
dividend?  If so what price do you deem they are sold at?
-or-
2/Do you take up the rights, but in return suffer a negative 
'dividend' on the total portfolio for the dollar mount needed for 
the rights?  That would seem the most computationally easy way to do 
it.-or-
3/Do you 'sell' shares in equal dollar amounts from the rest of your 
portfolio so you have enough capital to take up the rights.  (in 
other words a sort of reverse of what happens when a company is taken 
over).   If so, you would also have the problem of deciding the date 
of this transaction.

Just curious.

SNOOPY






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