Replies to post #5768 on NewMarket Technology (fka NWMT)

[hiphopfurby]

Stockhead Read all of these Quotes about Spinoff's. It will be a great move here. IMO.

Corporations go through the effort, the expense and the stress of doing spinoffs in an attempt to increase shareholder value and to give greater visibility to divergent operations. Spinoffs are usually distributed as a tax-free dividend to existing shareholders and can be partial or complete. Spin-Off Advisors, a Chicago-based research firm, reports that 62 U.S. companies had a spinoff in one form or another last year.

The idea of getting smaller may seem positively contrarian, as one giant merger after another tops the news. But companies are attracted to equity carve-outs for several reasons: First, says Andy Sanford, a director in the equity capital markets at Salomon Smith Barney in New York, "Carve-outs unlock the hidden value of one of the company's subsidiaries." In addition, says Douglas Squires, a managing director of investment banking at Merrill Lynch in New York, "Many of these transactions are motivated by investors' desire for investment clarity"--for both the parent and the subsidiary.

Spin-offs are becoming an increasingly popular theme driving the stock selection strategies of some funds. The most recent research into the phenomenon suggests that news of a corporate break-up could provide a valuable investment opportunity.
A spin-off is the sale or distribution to shareholders of new shares in a division of a parent company.
A sample compiled by Lehman Brothers shows that since 1990, the average spin-off has outperformed the S&P 500 by 13.3 per cent in its first year as a standalone company. The average parent company has outperformed by 14.4 per cent in the 12 months before the spin-off is completed.
"Most of the time, parent firms are seeking an increase in operational and strategic focus in order to unlock value," says Henry Chip Dickson, of Lehman. "In such cases, parents believe the sum of the parts is greater than the whole, and through greater focus they can increase shareholder returns."
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There is nothing wrong with spinning off as the above quotes point out. It is all on the UP and UP. And it will benefit both companies and US as shareholders big time.

Lehman Brothers was an American Express spinoff
Lucent was a spinoff from AT&T

List of spin-offs companies
Companies do this all the time.
Chipotle if a spin from MCD.

Chipotle Mexican Grill CMG

Clear Channel Outdoor CCO

Cowen Group COWN

Double Hull Tankers DHT

Mueller Water Products MWA

NUCRYST Pharmaceuticals NCST

Security Capital Assurance SCA

Spansion Inc. SPSN

SunPower Corp SPWR

Tim Hortons THI 3

Tronox TRX

Verigy Ltd. VRGY

WebMD Health Corp. WBMD

[mocosarge]

Stockhead,

NMKT hasn't given anything away yet. Remember, they are not giving away, they are giving a dividend. That is different than charity. We have all been waiting patiently for the fruits of our labor. I would suggest to you that you buy as much as you can @.31 LETS MAKE BIG $$$$$$$$$$$$$$$$$$$$$

[Charleoi]

"Lastly, how much value did NMKT give away to the shareholders of the shell company?"

Shareholders deserve to know this. The fact that you have to ask the question is telling. It wasn't disclosed. Why?

Also, in order to properly understand the cost of this deal (buying a publically listed company that was rejected for bankruptcy protection), you have to factor in:
1. Current liabilities exceed current assets by $400k - that's a future cash outflow
2. Part of NMKT China was given away to the shareholders of the public company
3. There's overhand from being a bankrupt company...regardless of switching the name and ticker symbol


Having said that, I think Phil's NMKT China story is a big lie. There is no sign of office infrastructure on the balance sheet, nor has he every disclosed in an SEC filing China's actual results.