- 40 - Technology's "blackout" policy9) and that the sale of stock constitutes 15 to 25 percent of daily trading volume. Mr. Much also considered "blockage" (referring to the market's ability to absorb an individual block of stock without an adverse impact on the market price), analyzing block trades between June 27, 1989, and April 16, 1993, the length of the holding period, blackout restrictions, and the relative size of the block; he concluded that a 5-percent blockage discount was appropriate. Moreover, he took into account the transaction costs (estimated to be $500,000) necessary to sell the block of shares. Mr. Much concluded that gross proceeds to J.R. Simplot Co. would approximate $173.7 million. As an alternative means of realizing value, Mr. Much considered selling the Micron Technology stock via a secondary stock offering. Using this means of selling the stock, Mr. Much determined that J.R. Simplot Co. would realize $176.4 million. Mr. Much then considered income taxes payable as a result of J.R. Simplot Co.'s selling its Micron Technology holding. Using the estimated $176.4 million sale proceeds (via a secondary stock offering), and after considering corporate income taxes (40 percent) on the gain, Mr. Much determined the maximum amount of net proceeds J.R. Simplot Co. would realize from the sale of its Micron Technology stock was $111,193,870. 9 Micron Technology maintained a trading "blackout" policy that prohibited insider transactions in the stock for a period from 30 days before the end of each quarter until after each quarterly earnings announcement (which typically occurred approximately 2-3 weeks following the end of every quarter).Page: Previous 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Next
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