Can't blame the CEO (Srinivasan) from wanting the spinoff, but will one of you that understands how this works tell me how this will benifit your (my) CNS stock. This is where Srinivasan will make a fortune, but I could care less about him.
could help us longs. Basically, CNS would do an IPO for say 20% of KBToys.com. This would create a "pure .com play". CNS would own most of the new company's shares, and you could track it's value as "mostly" additive to CNS. Hopefully, if the IPO is successful, CNS spins the remaining shares off to the existing holders. That's the theory, and the hope.
However, keep an eye on etoys if you want to gauge the success of a KBToys IPO. I think the drop in eToys post IPO price has had more to do with the down turn in CNS than even the markets slide. CNS overall is turning around, and I think Merrill Lynch is correct, this stocks got a lot of upside potential. Good investing Longs.