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Why Not Tie Shares to Product Purchases?

I was just thinking about the Corel merger and its adverse affect on INPR
stock, and the thought occured to me that one way to prevent this kind of
self-destructive nincompoopery from going on would be for firms to include
stock as part of the product, and make this the only way shares could be
obtained from the firm. For example, you buy Delphi Pro and you get ten
transferable voting shares in Borland. This has several benefits:
   1) There is no separation of power from influence, as only the people
directly affected by a product (the consumers)  have a say in the workings
of the company that sold it to them.
   2) Share value would only be diluted by sales of the product, leading to
more stable asset pricing.
   3) Firms would be owned by their customers, who presumably know best what
consumers want.

    I think that if the Corel merger ends up brings INPR down to a low
enough level, Borland should simply buy all outstanding shares, kill the
merger and then institute a policy of issuing stock only via product
purchases. It could be the first firm owned by its customers.

 

Re:Why Not Tie Shares to Product Purchases?


Quote
John Jacobson <john...@xnet.com> wrote in message news:39060ddc@dnews...
> stock, and the thought occured to me that one way to prevent this kind of
> self-destructive nincompoopery from going on would be for firms to include
> stock as part of the product, and make this the only way shares could be
> obtained from the firm. For example, you buy Delphi Pro and you get ten
> transferable voting shares in Borland. This has several benefits:

I agree on this one. And perhaps if you can get more stocks with voting
power for each licensed use of any of their product including Visibroker,
CORBA, Midas, App server, and other multi-licensing products as well that
you deploy (with the voting power accumulating to the company developing the
application).

Re:Why Not Tie Shares to Product Purchases?


Quote
John Jacobson wrote:

> ...one way to prevent this kind of
> self-destructive nincompoopery from going on would be for firms to include
> stock as part of the product, and make this the only way shares could be
> obtained from the firm.

        For as much as I like the idea, the point of selling the stock in the
first place is to raise capital, and if they could sell enough product
to do the same, there would be no need to bundle stock with it.

        -Craig

--
Craig Stuntz            Vertex Systems Corporation
Senior Developer        http://www.vertexsoftware.com

Re:Why Not Tie Shares to Product Purchases?


This is a joke, right?  This scenario falls apart for several reasons:

a)  Do I have to pay for the stock or is it given to me for free?  If free, this
is total dilution, if I have to pay for it, then i) why do I have to buy stock
to use the product, and b) what is the price I buy it at?

b)  If this is the only way that stock can be purchased, then what do I do if I
want to sell the stock?  You have defined an illiquid market that doesn't permit
me to sell once I have been forced to buy.

c)  How much stock are we talking about?  One share for Delphi Pro?  What good
is that?  Why do I want the extra reporting and accounting headaches for four
bucks worth of questionable stock?

d)  What are you going to do with all the shares currently outstanding?  My one
share against an institutional investor's 1,000,000 shares doesn't mean much.
And why would existing shareholders ever agree to have their stock diluted?

e)  Why does customer ownership imply better customer service?  Wouldn't
employee ownership imply better service?  After all, no customers, the stock
tanks, there goes your retirement.

f)  Finally, you and all the other anti MS types would be screaming absolute
{*word*76}y {*word*190} if MS attempted to tie product sales and stock together... I can
jsut hear all the reasons why this would be a bad, bad thing.

Quote
John Jacobson wrote:
> I was just thinking about the Corel merger and its adverse affect on INPR
> stock, and the thought occured to me that one way to prevent this kind of
> self-destructive nincompoopery from going on would be for firms to include
> stock as part of the product, and make this the only way shares could be
> obtained from the firm.

Re:Why Not Tie Shares to Product Purchases?


Quote
"Wayne Herbert" <wherb...@keymaps.com> wrote in message

news:3906F3D9.1BB4B92A@keymaps.com...

Quote
> This is a joke, right?  This scenario falls apart for several reasons:

   No, it is an interesting "what if..." speculation. I am not sure that SEC
regulations would even permit such a scheme.

Quote
> a)  Do I have to pay for the stock or is it given to me for free?  If
free, this
> is total dilution, if I have to pay for it, then i) why do I have to buy
stock
> to use the product, and b) what is the price I buy it at?

   You would have to buy the product to get any new stock from Borland,
otherwise you would have to rely on secondary markets. Think of this scheme
like a gold standard. It simply ties stock prices to a real asset. The
amount of outstanding stock is tied in to convertibility to the firm's
product.

Quote

> b)  If this is the only way that stock can be purchased, then what do I do
if I
> want to sell the stock?  You have defined an illiquid market that doesn't
permit
> me to sell once I have been forced to buy.

    No, I said they would be transferable.

Quote
> d)  What are you going to do with all the shares currently outstanding?

   That is a complication that would be gone if INPR became chaep enough to
Borland to buy back all their shares.

Quote

> e)  Why does customer ownership imply better customer service?  Wouldn't
> employee ownership imply better service?  After all, no customers, the
stock
> tanks, there goes your retirement.

   That only applies if it is an employer-finded or administered retirement
fund.

Re:Why Not Tie Shares to Product Purchases?


John Jacobson:

I like it!
But don't ask me to do it here!

I know this is impractical but.........
Borland shoud buy their way out of the merger!
with stock shares valued as of the signing.

Of course this would raise a big to do,
but they could blame Corel for the drop in value
and wear them out in court.

I must be a genius. ar ar!

Craig.

Re:Why Not Tie Shares to Product Purchases?


I wouldn't be surprise if they actually did something like this. As I said
in antoher thread, they(board) are no Einsteins but
not stupid either. Could be something like this planned.

Marcus

Craig Leidy <surfs...@mediaone.net> skrev i
diskussionsgruppsmeddelandet:39076134@dnews...

Quote
> John Jacobson:

> I like it!
> But don't ask me to do it here!

> I know this is impractical but.........
> Borland shoud buy their way out of the merger!
> with stock shares valued as of the signing.

> Of course this would raise a big to do,
> but they could blame Corel for the drop in value
> and wear them out in court.

> I must be a genius. ar ar!

> Craig.

Re:Why Not Tie Shares to Product Purchases?


Quote
> I wouldn't be surprise if they actually did something like this. As I said
> in antoher thread, they(board) are no Einsteins but
> not stupid either. Could be something like this planned.

Lets see, if they buy themselves out now, at this price, do they get to vote
on the merger? Then they vote NO, and the price (hopefully) goes back up, thus
actually getting them money. Where's the mistake?

johannes
--
Please reply in this newsgroup only
 - SIP solutions -
http://www.sipsolutions.de/

Re:Why Not Tie Shares to Product Purchases?


Quote
> Lets see, if they buy themselves out now, at this price, do they get to
vote
> on the merger? Then they vote NO, and the price (hopefully) goes back up,
thus
> actually getting them money. Where's the mistake?

And, the next question, is the case (an eventuality)
going  to be tried in the US or Canada?

Craig.

Re:Why Not Tie Shares to Product Purchases?


Quote
>And, the next question, is the case (an eventuality)
>going  to be tried in the US or Canada?

>Craig.

That depends which side they bury the survivors on!

Eric

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