MA Talk

[buckhunter102001]

THOUGHTS...SPIN-OFFS and REVERSE MORRIS TRUSTS
I didn't want to post this on the other board as it seems it's difficult to get intellectual responses. I know I post a lot and have numerous theories but it seems everytime I find new info it opens another possibility.

I posted this the day that David Rifkin changed his Twitter from Atrinsic, Inc. to Atrinsic Interactive

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=74136672

ATRN - David Rifkin just updated his Twitter to indicate he is now the VP of Search at Atrinsic Interactive, rather than just Atrinsic (As it stated before). Could we see a similiar scenario to the traffix buyout?...If so, should soon see a name change to reflect the company's primary business model...Is Atrinsic Interactive (subsidiary) acquiring Atrinsic (The parent company) or maybe Atrinsic Interactive being purchased from Atrinsic by another company. Or, even better for long term holders is the company has really drilled down on its bread and butter and becomes a top tier ad agency and begins trading in the multi dollar range. I'm down for waiting.

https://twitter.com/#!/davidrifkin


Now, fast forward to the PR
http://www.prweb.com/releases/prweb2012/5/prweb9521567.htm

Why would Atrinsic, Inc. (Yes I intentionally bolded that) discontinue its agency business...AKA Atrinsic Interactive?

Consider this option: Spin-off or Split-off

Perhaps there was a deal on the table by a potential acquirer but they weren't willing to hit Dyne's target price and so Dyne did what any shrewd businessman would do and pulled the deal off the table and decided to split off the Atrinsic Interactive from Atrinsic, Inc. This would be a valid reason for the PR to state that Atrinsic, Inc. is "winding down support" of the Agency Business (AKA Atrinsic Interactive)...Recall the wording in the 8-K where they announced they were "winding down" support of Kazaa????

See...Atrinsic Interactive is attending the SMX East 2012 conference, NOT Atrinsic, Inc. Booth #345

http://searchmarketingexpo.com/east/2012/exhibitors

http://blogs.law.harvard.edu/corpgov/2012/02/22/spin-offs-and-reverse-morris-trusts/

Even with the recent slowdown in M&A activity, spin-offs have been among the transactions of choice in the past year. With everyone from economic mainstays like ConocoPhillips and Kraft to high-profile new players like TripAdvisor engaging in separation deals in the latest round of deconsolidation, it is an opportune time for dealmakers to consider the general implications of a spin-off on transformational corporate merger activity and certain structures that may allow for a combination of the two.

Although generically referred to as spin-offs, the separation transactions we have described can be structured as either a pro-rata distribution of shares of the subsidiary to the stockholders of the distributing parent (a true spin-off ) or a voluntary exchange of the distributing parent’s securities for those of the subsidiary at a set exchange ratio (a true split-off ).

Under the right circumstances, RMTs can be a powerful method for planning a tax-free spin -off followed by a transformational transaction. While a straightforward direct sale of the distributed business would be taxable to the distributing parent, an RMT facilitates such a sale (and potential associated leveraging) on a tax-free basis. If a split-off (as opposed to a spin-off ) is successfully employed, the distributing company achieves the added benefit of “repurchasing” some of its outstanding stock, with a resulting increase in EPS. By combining the attractive elements of a spin- or split-off with the strategic benefits of a stock-for-stock combination, an RMT can provide stockholders with increased value and diversification, allow a distributing parent to streamline its business and even create a monetization opportunity.

So, under this theory even my theory of the company repurchasing the float back into the treasury to increase EPS would make sense too.

It also makes sense with the discovery of the possiblity of Atrinsic being assigned an investment bank for equity raising so they can have capital to repurchase those shares

The moral of the story...if you want to get paid, don't sell your shares!

WHAT ARE YOUR THOUGHTS????