NanoNews That Doesn't Make Us Go "Yippeee!"

We got two pieces of news in nanoland the other week that made us go "oy vey." (a distressed yiddishism that has a million meanings; in this case, "get me the heck outta here.")

First, TINY (Harris & Harris) issued a "deemed" dividend of about $1.12 per share. There's good news and bad news. The good news is they're not actually paying the money to shareholders; the dividend is only "deemed" to have been given. What sense would it make to pay the money out to investors? The shareholders want the company to invest the cash in small tech companies in the hopes of making VC-type profits. They don't want their money "back."

The bad news is they're not actually paying the money to shareholders; the dividend is only "deemed" to have been given. Hey, not getting the money, but still having to pay taxes on it as if you had, is NOT FUN. Now, the board of directors of TINY is not to blame for this mess. They inherited the BDC formula which the company has been wedded to by law. Unfortunately, for nanoland news and the investors in this stock, the whammy of the BDC hits the company's pocketbook, the shareholders' (although a higher stock basis may lessen future taxes) pocketbooks and focuses attention on the drawbacks of this model. VCs, for example, have much more freedom, much more privacy of action (the BDC is "public" afterall) and a more straightforward tax regime.

My fellow blogger, Steve Edwards, beat me to the punch on the second "oy vey" news issue in the recent past. His Jan 6 note hits most of the right keys by my lights. The ONLY reason he "won" the "race" is that I spent so much time last week struggling with how to say in a gentle way how weirded out I was that the Lux index had to go through a "rewrite" or "quarterly update" so soon after public launch. I am still mystified by Intel, Toyota, GM, NEC, et al. even being mentioned in the same breath as a "nano index". I still don't get it. Exchanging Toyota and Intel for GM and NEC strikes me as so much "arranging ashtrays on the deck of the Titanic". I know there's a supportable argument/explanation, and that there was a rigorous academic approach by Lux . . . but still I have to wonder: Are Steve and I the only ones scratching their heads?