Swaz I did not say that. Did you read my other posts i explain what the subs can do here and the positive influence they can have. Read the bottom of this post to see what the industry says about subs.
If you own the nmkt parent company you qualify to get free dividends in the subsidiaries. If the subsidiaries companies do well then those dividends will be worth good money. In effect the better or higher valued a subsidiary is the higher our dividend yield will be.
NMKT will continue to give its shareholder more and more dividends. These first 3 are just the beginning.
Also keep in mind as the subsidiaries companies grow so does the nmkt parent.
Plus the nmkt parent itself will sell shares in the child subsidiary companies. The nmkt parent company will be able to pay itself a dividend by selling fractional ownership in the SUBS. And as it liquidates small amounts of stock the parent will increase it cash position.
What this does is it gives the smaller companies public listings. And in those public listings the SUBS can grow into larger companies. They can acquire new companies, pay of debt, and pay for the cost of operations themselves without draining resources from the NMKT parent company as they are now.
The stronger those little child companies grow the stronger the nmkt parent company grows as well.
This is a well established practice. And if it works out well everyone wins.
Read all of these Quotes about Spinoff's. It will be a great move here.
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."
List of spin-offs companies do it all the time. Chipotle if a spin from MCD. Lehman Brothers was an (AMEX) American Express spin-off
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
The major plan the revolutionary plan is to launch the small new technologies into their own publicly listed OTCBB subsidiary companies. This way they can self fund while they try to grow and pay for themselves without draining the parent as they try to become successful.
The better they do work out the higher thier individual valuations should be. The higher the valuation they attain the better it will be for both NMKT and shareholders when they sell shares in the separately listed entity for a nice profit. ----------------------------------------------- From the nmkt filing below.
"NewMarket contains each technology product and service offering within a subsidiary company. As the product and service offering matures, NewMarket plans to monetize the overall value of the technology offering through an incremental liquidation of stock in the subsidiary company housing the now mature product or service offering. The revenue and profits of the now mature product or service offering combined with the income from the incremental sale of stock in the associated subsidiary will provide NewMarket with a profit margin advantage.
The NewMarket corporate structure that enables the incremental sale of subsidiary stock in order to boost product and service revenues and profits is also the aspect of the NewMarket business model that attracts investment in technology product and service innovation. In addition to selling stock in subsidiary companies to combine equity income with traditional product and service revenue and profits, the subsidiary structure provides an attractive long term and incremental return on investment opportunity for both institutional and retail common shareholders. When a subsidiary company is positioned for incremental liquidation through an independent public listing or the sale of subsidiary stock to a third-party company, NewMarket will issue subsidiary stock to common shareholders through a dividend declaration." -----------------------------------------------
The Sum of The Parts Is Greater Than The Whole
Spin-Offs often result in a higher aggregate value for the constituent pieces. Many diversified companies are electing to spin off parts of their business, finding that this restructuring technique can create significant value for shareholders.
It will be hard to properly value this company going forward.
Soon this company will transform itself into such a different entity that it is a waste of time to compare the NMKT of today with the NMKT of tomorrow. It really will be apples to oranges.
----------------------------------------------- Here is what I think the big picture might start to look like. NMKT at first will split 3 ways.
VOIP This segment will try to turn into the next sunrocket maybe if things work out maybe a better version of Vonage.
Systems Integration This piece I think will handle all the dirty work (installs upgrades) for all the SUBS. Since this segment will be streamlined they will probably be able to get costs in line. Cutting costs should be easier as NMKT streamlines instead of the MULTI-HEADED HYDRA that it is now.
NMKT China I think this part will concentrate on growing new partners and acquiring new business in the fastest growing region in the world. But if it does drum up new business it will toss the install part back to the SYS INIT sub. If a client needs VOIP refer back to that SUB. ----------------------------------------------- Numbers today and the business today will not mean anything once NMKT changes and acquires new companies and grows them organically.
In short throw everything you currently see in NMKT out the window because everything is going to change for the better.
NMKT will issue dividends to us the shareholders as they create more companies but the NMKT parent will also sell shares in these units to pay themselves a dividend as well. And most small streamlined stocks that trade out there have pretty good P/S valuations. If some of the subs get a decent P/S they might actually trade higher than the NMKT parent.
Right now I think NMKT is trading at a big discount because people EITHER don't believe the CEO, or most are not quite sure what nmkt does.
I think there is every chance that a sub might trade with a higher market cap than the NMKT parent. People want transparency and goals from NMKT. However since NMKT is a MULTI-HEADED HYDRA, They are Here, there and everywhere people may not see it all clearly.
Let’s sell phone cards here Oh yeah lets open this entirely NEW business segment in China. Let’s set up IT training courses in Venezuela. Yeah and lets some up Muni WIFI. Oh yeah some sort of medical technology stuff as well. Voip yeah lets compete with Vonage.
Buyers here are like "What is going on here? What does nmkt do exactly?"
The subs are the best thing that could happen here. Ultimate transparency and a clear set of goals will only help here. ----------------------------------------------- Here is a list of things NMKT has accomplished
1- Profit- 8 consecutive quarters of that now. NI has gone up Year over Year over year. Keep in mind most companies on the OTCBB and most companies NMKT's or sectore age do not have any profit at all.
2- Revenue growth- Year over Year over year
3- Diversification- NMKT is in the medical industry, homeland security, VOIP, and Systems Integration I am sure there are other segments I am forgetting as well. I don't know about you but I love the fact that NMKT is always broadening their horizons. I mean they are selling phone cards for petes sake…
4- Globalization- This small new company has expanded into the 2 fastest growing regions in the world. No small feat to open an office in China and deal with the Government. Also they have formed partnerships with some of the biggest IT companies in that country.
5- Ambition- Contrary to popular belief NKKT is trying to grow into a major corporation and they want to do right by its shareholders. They want off of the OTCBB and they are going to give shareholders dividends. They have already started this process with NMKT China. -----------------------------------------------
Below are some of the CEO's quotes. ----------------------------------------------- "I don't think the OTCBB is an appropriate long-term environment for NewMarket.
While we plan to move NewMarket itself to a new exchange
I do not believe OTCBB listings play any role in creating immediate value for founders of companies.
Provided the founders can successfully build an ongoing concern that outgrows the OTCBB exchange, then the founders can enjoy the opportunity to financially benefit from their sweat equity investment.
We will explore spin-off registrations again once NewMarket has achieved a listing on another exchange. " ----------------------------------------------- HMM I think he might want to get off of the OTCBB! What do you think?
----------------------------------------------- Here is a website of most of the stuff that nmkt either owns outright or has majority or minority ownership in.
NMKT spins off a subsidiary and gives you shares as a dividend. Now that the spun off company is operating indpendently they can increase their outstanding by much more than NMKT could have. The end result is NMKT still has the same revenues but you have a bunch more shares aka dilution. It's been 3 years and there are no spinoffs...just a promise that all these acquired bankrupt companies will eventually boost earnings with NMKT help.
The money you pay for your shares is given back to you in tons of shares of a spunoff previously bankrupt or borderline bankrupt company. I might play this short term for a possible 40% or more short term gain. Hope it rises on news and then sell. I think it goes back into the 20s.
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