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Tuesday, Sep 26, 2023



Wait for End of Lock-Up Before Buying New Stocks

Dear George: I heard an analyst on television say investors should wait until after the “lock-up period” before investing in a company that has recently held its initial public offering. I don’t quite understand what that means. Please explain.

, Roy, Encinitas

Dear Roy: I think a lot of people would trade their first-born child to have the opportunity to get in on a hot IPO. Fortunately for the kids, even that probably wouldn’t be enough to be included in the lucky list of people who get to buy a stock at its offering price. That privilege goes to the largest clients of the firm that serves as the underwriter for the IPO.

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So, how do the rest of us get in on these deals? We wait and buy the stock in the open market after the offering hits the street. A lot of people jump right in the first day and try to ride the crest to some quick profits. Sometimes you luck out and can make a fast buck. However, most of the time you wind up paying an obscene premium for the stock and watch the price slip away.

Take Mp3.com as an example. No doubt the IPO for this Internet music company was one of the most anticipated deals of 1999. It came to market at $28 a share and the first sale was at $105 when it opened for trading. It hasn’t come close to that since then.

The more practical way to play the IPO market is to be patient. It is quite common for the price of a new stock to come back down after it has its original spike up. Of course, this isn’t always the case, but it happens quite often.

The biggest price correction usually occurs after the so-called lock-up period. This is a period of time , usually 180 days , after the offering when insiders are restricted from selling their shares. This restriction is designed to keep the large shareholders from dumping their stock right after the IPO to take advantage of the high price.

Lock-up periods can vary from issue to issue. Check the offering prospectus to find out exactly how long it will be before the insiders can sell. If there is a particular issue that you would like to buy, it might be a good idea to mark your calendar on the date the lock-up ends.

Watch the price and the daily trading volume for a couple of weeks to see if there is any sign of a mass exodus from the shares. If there is , and you still think the stock is one you’d like to own , then take advantage of the opportunity.

Dear George: Do mutual funds ever split?

, Julie, Pacific Beach

Dear Julie: It is a rare event, but mutual funds do split from time to time.

Just recently a closed-end fund that trades on the American Stock Exchange announced a 2-for-1 split. The Nasdaq-100 Tracking Stock (Symbol: QQQ) will split the stock in March after the price of the shares doubled in the past year.

The fact is that mutual funds rarely split in price and there is a good reason for that. Stock mutual funds are constantly buying and selling positions in their portfolios. As a result they generate capital gains that are distributed to shareholders at the end of the year.

Those distributions reduce the net asset value of the shares. That causes the price to hold in a relatively tight range. However, if those distributions are reinvested, the overall value of the investment continues to rise year after year.

You’ll find that most funds that conduct stock splits are either closed-end or open-end index mutual funds. That is because they do not manage their portfolios and generate little in the form of capital gains. That means the value of the shares will continue to climb and it becomes necessary from time to time to split.

George Chamberlin is the host of “Money in the Morning,” heard weekdays from 9 a.m. to noon on Ksdo.com A/M 1130. Send letters to P.O. Box 1969, Carlsbad, CA 92018, or E-mail him at (george@,moneyinthemorning.com).


Online Job Interviews Could Be Wave of the Future

Dear Joyce: At 37 I am looking for a new job, after holding my current position for 12 years. I am surprised to see how things have changed , an executive search firm wants me to do a “remote” interview online. Company Web sites insist you fill out a questionnaire and pass a qualifying test before they’ll accept you as an applicant. And I see kiosks in malls that take applications for banking jobs, “interviewing you by computer.” If I were much older, I’d feel like Rip Van Winkle. Back to the online “live action” interviews: Do you have tips for doing well?

, R.S.N.

Your observations ring true for companies with more than 1,000 or so employees; smaller companies still use lots of the personal touch in hiring people. Recruiting is a moving target. Basically, automation is racing along because in-house recruiters have crushing workloads , they may have as many as 150 jobs to fill, whereas 20 years ago they rarely handled more than 40 open positions at a time. Today when faced with stacks of job requisitions, recruiters, rather than winning budget dollars to hire helpers, are told “just do it.” Enter automation, much of which is Web-based.

The video online interview (VOI) is a recently minted tool, quickly adopted by executive search firms that can multicast the interview to several locations and tape it for later showing if needed. Not much video interviewing is yet Web-based, but that will change.

Recruiters filling high-end jobs work with high-end professional videoconferencing equipment that doesn’t distort your image or require a time delay after you hear a question.

Professional technology uses digital telephone lines rather than zipping data over the Internet. Check in advance with the videoconferencing manager where you’ll be interviewing for tips on how to dress, use the microphone and so on.

You can also ask for performance tips at other videoconferencing facility locations, including campus career centers, commercial conference centers (Televideo Conferencenters), airport lounges, hotels (Radisson), office service firms (Kinko’s), large staffing firms (Manpower), executive recruiters and job fairs. Many corporations (Citibank) operate videoconferencing centers.

Employers and recruiters choose and pay for the videoconferencing center’s work. You, the job seeker, never should pay a dime.

The Web-based desktop videoconferencing systems do require special behavioral consideration because they lack ample bandwidth. Bandwidth is the amount of data that can be transmitted in a fixed amount of time. Only about 10 percent of the nation is flush with bandwidth.

The desktop systems are not powerful enough to eliminate the jerky frames and halting audio. For these systems that run slower than 30 fps (frames per second), all kinds of precautions should be taken to keep you from appearing “warped.”

For example, try not to frown. You want to avoid being frozen with a frown for several seconds before the frame changes, a technology factor you can’t control. Or, if you have deep-set eyes, try to keep your head up to minimize shadows.

If you’re trying to do your own interview setup, it’s important to know about the equipment on both ends of the interview. The lowest common denominator controls. You may use a good transmission speed, say 30 fps, but the reception on the other end receives at only five fps. The five fps rules, and you’ll look jerky and choppy, and the conversation may collide.

I expect video online interviews to become far more popular as ample bandwidth becomes available. That could be sooner than you think, so I advise you to practice with a friend, using a desktop videoconferencing system. If you choose, you can buy a system for a few hundred dollars, including the Webcam.

Joyce Lain Kennedy is a Cardiff-based syndicated writer and author of career guidance books. E-mail career questions for possible use in this column to her at (jlk@sunfeatures.com).

& #352; 2000, Los Angeles Times Syndicate


Imagine shopping at a fashionable clothier. The salesperson, who helped you several years before, asks whether you’re married or have a “significant other” and how you feel about that person. You’re taken aback , you expected service, not a relationship. Such superficiality can annoy, even drive customers away, when focusing on providing service can cement them.

That’s according to Barbara Gutek, primary author, with Theresa Welsh, of “The Brave New Service Strategy” (AMACOM, $28.95). Gutek, who chairs the department of Management and Policy in the Eller College of Business and Public Administration at the University of Arizona, argues that the customer is dealing with an organization.” She sees a trend in the shift of many businesses to rapid, efficient customer service as the carrot to attract new customers and lure others from competitors.

Although she doesn’t have statistics, Gutek cites service-oriented companies, such as brokerage houses, barbershops, even banks, which used to provide service by building relationships. Many of these businesses are now transaction-oriented companies fueling the trend of “enhanced encounters … (characterized by) fast, convenient, low-cost service in a familiar and uniform process.” This untraditional approach to service shifts the focus from relationships to delivery. Also unlike traditional customer service, it is conducted by people who don’t know each other. When people attempt to personalize these transactions, they’re diminishing the quality of service by making it somewhat personal when the very nature of the transaction isn’t.

The authors note customers of encounter businesses deal with different employees in the company rather than the same individual all of the time. In contrast, a relationship business prefers continuity for its customer interactions. Pseudo-relationships, which don’t foster customer loyalty, can emerge when an employee seems to “know” a person because he’s scanned information in a database.

“Relationships are the model for all types of service,” states the book. “But encounter businesses should not claim they have a relationship with their customers. Instead, they should focus on the strengths of encounters , low-cost, fast and reliable service, convenience and professional management.

“Many of the mergers in banking have swallowed up the smaller ones, where relationships used to be personal,” Gutek maintains. “Enhanced encounters have replaced the relationships,” so that knowing a customer’s name becomes obsolete.

The challenge for all kinds of businesses, including law firms and consulting firms, where customer loyalty often goes to one individual, is to create loyalty to the organization so the client doesn’t move on when the employee does.

The authors commend enhanced encounters for their power to bring customers back. Focusing on these encounters “keeps companies from making the mistake of thinking that they’re offering something personal, when they aren’t.”

In this environment, attempts to personalize relationships blur the distinction that needs to be made. Customers who want relationships will move on.

If you provide customer service through enhanced encounters, you will meet some people who really want relationships. Although you may feel you’re bucking a trend, “focus on making service accessible, reliable and efficient, which will bring customers back,” Gutek counsels.

How to minimize disappointment with customers who want to work with their previous contact? Try Gutek’s recommendation, promoting expertise and experience, such as, “Joe is the expert in what you need this time, making him the most appropriate person.”

This may persuade the customer to alter his expectations in favor of the best service.

But there is preventive medicine too.

“You can be very pleasant, courteous, knowledgeable and respectful toward customers without being personal,” Gutek states. “The lack of being personal doesn’t indicate rudeness, but that you just don’t know them.”

If enhanced encounters form the basis of your company’s service, consider letting customers know early how customer service works there.

Still, watch out, or you may drain your customer base. Even Gutek concedes, “Customers love relationships.”

Mildred Culp sponsors the annual WorkWise Award. For information, visit (www.work-wise.com).

& #352; 2000. Universal Press Syndicate


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