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SGI to shower shareholders with MIPS stock

SGI to shower shareholders with MIPS stock

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Troubled SGI is to rid itself of its remaining shares in MIPS, the processor company it founded and spun off some years back, in a move not unlike 3Com's upcoming Palm Computer stock giveaway.

SGI currently owns some 25 million-odd MIPS shares, which amount to 65 per cent of the semiconductor company. SGI plans to distribute them among its shareholders on 20 June, following a dividend distribution on 6 June.

The cost to SGI is near $485 million, which is effectively what the company would have saved by not having to pay tax thanks to its loss-making status. SGI will now have to stump up tax dollars to the tune of $485 million at the end of its fiscal year, which occurs on 30 June.

Unlike 3Com, which this year decided to give its post-IPO stake in Palm, SGI's giveaway has apparently been on the cards since the company reorganised (again) back in August 1999, so the move is essentially about paying SGI shareholders not to sell out: 'Hang on in there and we'll give you stock in a company that's actually worth having a share of.' ®

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