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Stocks V / Viacom, Inc.


Subject:  Re: VIA and VIAb Date:  3/1/2000  11:41 PM
Author:  carthage Number:  52 of 312

Burner5's question: "Can someone please tell me the difference between buying shares of VIA and VIAb? I have heard that one is a "preferred share" (I think that is VIAb, right?), but they both cost about the same, and both prices seem to fluctuate together. So, wouldn't buying VIA be the same as buying VIAb?"

Actually, the preferred stock is VIA, not VIAb. The primary difference is that holding shares of VIA gives the shareholder voting rights, while shareholders of VIA B have no voting rights for things like electing the board of directors, etc.

In the past, the Redstone family wanted to maintain control of the company while at the same time generating cash through additional stock offerings to the public. Solution? Create a second stock, VIA B, that can be sold to the public (generating cash)without extending any control (through voting rights) over company direction.

As the Redstone family controls over 50% of the VIA or voting shares, there is no value to common stockholders to buy that stock, since they will never be able to influence the agenda at the annual shareholders meeting.

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