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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: AD who wrote (60141)5/1/2002 10:49:09 PM
From: AD   of 99280
 
3. Avoid serial acquirers and big acquisitions.
I could also use WorldCom as an example of an acquisition strategy gone bad, but let's instead look at Tyco (NYSE: TYC), a serial acquirer, and AOL Time Warner (NYSE: AOL), the result of a mega-merger. I took a lot of flak when I warned investors last November about these two stocks, but they've fallen 62% and 42%, respectively, since then. Making many small acquisitions or one big one are both fraught with peril, yet some CEOs insist on engaging in such behavior. There's not much the average shareholder can do about it -- other than sell the stock, of course.

Today, my least-favorite acquisition/merger is Hewlett-Packard (NYSE: HWP) and Compaq (NYSE: CPQ). Two stones tied together still sink, so avoid this one like the plague.
fool.com same article as previous
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