Sunday, February 25, 2007
I canceled a planned outing with FirstWoman last night because I was tired, frustrated, and full of inertia. I just didn't want to make the effort. I canceled rollerskating with Angie this evening for the same reason.
I'm frustrated and feeling guilty because I've got so much to do, and it's not getting done. Every time I start something from the "to do" list, something happens and I get sidetracked.
This afternoon I decided I MUST start pulling together the tax stuff for The Angel, and start looking into selling more stock for Piper's planned portfolio balancing. The first thing I picked up from the financial bin was a proxy packet from my favorite stock.
This particular stock is one that I have told Piper I will not sell! No way! Not for nuthin! I like it! The stock has gone up steadily for the past six years - it is now worth more than five times what it was in 2000, and it pays good dividends. He agrees that I'd be crazy to sell it - in fact, I should buy more.
The company is being "acquired". A smaller company in the same industry is going to buy it out for 26 billion dollars. For each of our shares, we stockholders will get .67 share of the smaller company, and a bunch of cash.
I am being asked to vote my shares, for or against the acquisition.
Naturally, I need more info.
Three hours, and a trip around the internet, later, I voted a resounding NO!!! (Not that I have enough stock for them to notice....)
First of all, I will end up with 1/3 of my investment in equity, and 2/3 in cash on which I will have to pay capital gains tax. I would prefer a straight stock trade. Gimme a bunch of yours for all of mine. This deal amounts to selling 2/3 of a stock I never wanted to sell at all. I could turn around and buy more stock, but I'd still be out the tax.
Since the announcement, my company's stock has continued its rise, but the stock of the smaller company has fallen. Analysts seem to think that it is a "fair" offer to the stockholders, since .67 share of the smaller company plus the cash offered equals slightly higher than the current price of my company, BUT, and here's the scary part, most of them think that the smaller company is going to hurt themselves badly, that they really can't afford the 26 billion. So those ".67 share"s could be worth even less in the future, even though after the acquisition, it will be the largest company in the world in this industry. (A giant, but an injured giant.)
I am exceedingly annoyed.
That, The Amazing Race, and several phone calls, absorbed the afternoon and evening.
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Daughter and Hercules have been househunting in central NJ. Yesterday she said that they'd found the perfect house, and they had submitted an offer. The house had been on the market only one day. Today she called and said that someone else had submitted a bid, too, and it had apparently been accepted, even though their offer was probably higher. I wish I knew more about NJ real estate law, and how offers should be presented.
Emotional roller coaster for the kids. This is the second time that's happened to them in the past month.
I advised her to leave their offer "live" while they continue looking. The other buyers' deal may fall through. Besides, the real estate market is in decline, and in six months they may be able to get more house for the same money.
.
4 comments:
There are some "hot" towns in Jersey that are immune to the slide. Most of them have short, direct train routes into the city. Hoboken, Jersey City, Montclair and Westfield spring to mind immediately. Those house prices are going nowhere but up. (As are the property taxes...)
If Daughter and Hercules look around in some less-than-chic neighborhoods, they'll find house prices have fallen by an average of $50K. There are some good bargains to be had in towns like South Bound Brook, Bridgewater and the like but this may be too far south for them.
One house they liked was in the South Amboy area. The current one is near Jamesburg Park. Ideal for them would be somewhere in an oval between East Brunswick and Freehold. Access to NYC is not a big concern, as they both now work in NJ.
I had suggested looking at buying land, maybe out in the farm country around Freehold, and putting in a modular. Daughter says that a 1/4 acre lot would run about $130,000-$150,000 (Are you kidding me?!), and by the time they got all the permits and built the house, it would cost more than the itty-bitty houses on itty-bitty lots that they're looking at.
(Incidentally, the apartment they're in now is bigger than the houses they'd have to pay twice as much for per month.)
Perth Amboy seems like an up-and-coming place, just poised for gentrification. Maybe they could find a wreck of a 1920s house and restore it if they're the restoring types.
Yes, land really is that dear here. A number of houses in my neighborhood have ended up as tear-downs.
If I had it all to do over again, I'd go for a 2-family in one of the blue collar towns and rent out the other half.
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