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Technology Stocks : Red Brick Systems
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To: J L Segal who wrote (261)5/12/1998 3:32:00 PM
From: Smilodon   of 304
 
I forwarded that Hummingbird article to an enterprise software analyst at one of the brokerage firms who covers this area.

He said it looks like REDB. He knew of other companies who fit, but they were all private. The only alternative he could think of would be buying a subsidiary of a larger company, but said that would be very complicated. He said he would give it some more thought to see if he can think of anything else.

JL, I think you have really come up with something interesting. It certainly is worth a few months holding the stock. Also, your price estimate seems fair. I would guess $12 to 18 is what REDB would want. But problem is what sort of premium would Hummingbird be willing to pay, so as not to anger its shareholders. It is a lot easier to pay $15 when the target trades at $11 rather than pay $12 when the target is at $6, even if the underlying business is the same. So, we actually may have to wait for RedB to rally before they can sell, even if they have already agreed to a transaction.

Regards,

Archer
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