《国际企业并购》Ch10- Restructuring.pptVIP

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * Tracking Stocks (cont.) Telecom companies used tracking stocks in the 1990s to help finance the building of their networks Example: Sprint issued tracking stock to help raise capital to pay for its PCS network – multibillion dollar proposition This stock initially did well but then performed poorly All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan Tracking Stocks (cont.) Shareholders of tracking stocks only get rights to earnings of the entity in question They do not get voting rights for the overall company or even the division Often issued when the overall company is not trading at values management expects Issuing a tracking stock may be a way of separating a problem division without going as far as selling it off All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan Example of Tracking Stock: Carolina Group Carolina Group is the tracking stock for the Lorrilard tobacco division of Loews Corporation Loews Corporation’s other units include CNA Insurance, Bulova watch business Lorrilard faces approximately 1,200 tobacco lawsuits Was a drain on the parent company All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan Carolina Group Stock Price Source: Yahoo Finance All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan Tracking Stocks: May Be Attempted Solution to Failed Acquisitions ATT issued tracking stock in ATT Wireless in April 2000 – raised $10.6 billion One of the largest public offerings of equity of all time This proved to be only a temporary solution and ATT eventually broke itself up - again All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the ex