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Ford Motor Co. Message Board

  • fordlong fordlong Apr 19, 2000 9:05 AM Flag

    Canton & decentnames

    I'm re-posting this note from a previous post
    that I didn't receive any responses to:

    If you
    look at profile button above and read down it shows
    1.21 Billion Shares outstanding.

    It also shows
    Cash at $5.10 per share. My calculations show this at
    $6.17 Billion in cash value on each share of stock
    (1.21B shares X $5.10).

    If Ford has $25 Billion
    Cash (and readilly convertible securities) then the
    cash per share is $20.66. ($25/1.21B

    $10 Billion distribution is 40% of $25 Billion that
    company has. ($10/$25).

    Calculating this against
    $20.66 Cash per share(from above calculation then this
    equals $8.26 per share dilution. ($20.66 X

    So based upon this information, how will the $20
    distribution dilute the value of my shares by $20. I can only
    get to $8.26.

    I'm interested in all feedback
    relating to this post.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • The two responders to this post really think they
      know about a lot of things. Unfortunately they are so
      determined to prove their points that when confronted with
      facts, they vilify with invective, the ones who post
      irrefutable facts (to say the least). I believe they want to
      force some control over who and what is posted herein
      by attacking anyone and everyone who does not agree
      with their viewpoints.

      One claims to be a CPA.
      But his analysis of the law applicable to the
      proposed "enhancement" transaction has come to the point
      that my posts get deleted from this

      Sooner or later, the same analysis will appear in a
      formal announcement of the cash or stock "enhancement"
      deal. At that time, the truth of what I have been
      trying to relate will appear. I have run my analysis
      past many practitioners in the Subchapter C arena (one
      or two of which have been regular participants in
      NYU's continuing education programs in Federal Taxation
      during the last 25 years) and they concur with my

      " . . . if it were not so I would have told you . .

    • The family is not in a position to take the cash.
      They need to increase their share amount so that they
      are above their minimum share line to keep the 40%
      voting power. In this situation, I believe that they
      will have a few more shares to sell in the future if
      need be and still maintain their controlling
      interests. If anyone sees it differently, please post.

    • Fun wrote: "...whats your take as to why they
      structured it this way, outside of it benefiting the Ford

      Why do you say that? This benefits the
      family only to the extent they take all stock. If you
      take stock instead of cash your percent ownership
      increases in proportion to the family�s increase. If fact
      you got a better deal than the Ford family because
      the deal could not have been structured this way if
      the family did not agree to forgo the option of cash.
      You have an option - they do not.

    • with all the hoopla on the share reissuance and
      our general conclusion that its up in the air if we
      are bettor off or not, whats your take as to why they
      structured it this way, outside of it benefiting the Ford

    • but, i think you're making the mistake of
      applying book values of the company to market value of the
      company's stock. it can't be done.

      i think i may
      have replied to you indirectly thru another msg when i
      made the point, that any company's stock price will
      decline on ex-div day by the amount of a

      if a company's stock can decline $0.20 because of a
      dividend, what makes you think a $20 dividend won't make a
      comparable move?

      (besides, you can't use the cash
      figures alone. try making your calculations on the net
      worth of the company, not the cash. not that the result
      there will be any more meaningful, because, as i said,
      book value & market value are not comparable).

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