Replies to post #7364 on Interups Inc (ITUP)

[snow]

RD "3) And I know Snow is wondering about this as well. What will remain for ITUP after MCA is absorbed by Cow. How much of the gold assets and the roughly $300M in earnings you booked a year ago, will remain for ITUP? This question becomes even more relevant now because, as I just said, you basically can't transfer those assets to MCA..... "

You did not know but when you mentioned it you are correct that I am somewhat surprised. I feel that I got a gift horse when I had the opportunity to buy all those shares in Cow Capital at 15 cents per share. I did some thinkling the other day that I would like to share here. I have the impression that Cow Capital is expected to buy the WM arm of ITUP at a price that has already been fixed in a year - several hundred million dollars. To me it seems problematic to fix that price almost a year before the transaction takes place. Both companies have a lot of shareholders. To me the price should be fair to both parties. The WM arm of ITUP is at a very early stage of its existence if I am not mistaken. To me it seems far too early to know what will a fair market cap for that WM arm in a year. On the other hand Cow Capital is supposed to have several hundred million dollars in cash when it is listed. My view is therefore that it is not possible if one tries to be fair to both shareholder groups to decide on what Cow Capital should pay for the WM arm of ITUP at his stage. It should be assessed not long before the transaction takes place.

I would just like to add that since the WM activities are so new I think it would be a good idea for both ITUP and Cow Capital not to stake everything on these WM Activities. After all ITUP generated hundreds of millions of dollars in profits even before these activities were launched. Cow Capital is supposed to have equity to the tune of several hundred million dollars even before it acquires the WM arm of ITUP. It should be possible to spend those hundreds of millions of dollars on ordinary acquisitions of stakes in other companies even if the WM is less of a success during the next 12 months than is now expected. If that is the case I would expect Cow Capital to pay less for the ITUP WM arm than is now anticipated.


When it comes to who are the share holders of ITUP assuming a share count of 6.9 million I had the impression that the bulk of those shares are owned by the Palaypu family. I would have expected that t his would have been sufficient motivation to do one's level best in an executive role. The way human psychology is it matters more if you own 0.5% of a stock and that is lifted to one percent than if you own 50% and that for instance is lifted to 55%.

[palaypu0406]

Great questions as always but you have not looked into this correctly...
Will explain in the next 2 hours as I am still in bed -- will sip coffee and answer...

[snow]

RD "What will remain for ITUP after MCA is absorbed by Cow. How much of the gold assets and the roughly $300M in earnings you booked a year ago, will remain for ITUP? This question becomes even more relevant now because, as I just said, you basically can't transfer those assets to MCA....." I t hink these questions are very important for the shareholders of ITUP. What sort of business will ITUP engage in when it loses its WM arm? Espeically if ITUP (masala camptal) is only to have a fairly small stake in Cow Capital it becomes all the more important what happens to ITUP itself. After all you suggested not long ago that based on past profits that parts of ITUP that existed before the WM arm might be worth a p/e of 10 based on profits of more than 300 million dollars. Thus this is an extremely important question for the current ITUP shareholders.