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Technology Stocks : ProxyMed (PILL)
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To: Roy F who wrote (165)8/1/1999 12:47:00 PM
From: Thomas Kirwin  Read Replies (1) of 261
 
Salomon Smith Barney

Response posted by Brigam_98 on Yahoo! PILL message board to firing Salomon Smith Barney.....

958 of 958

<<<Salomon Smith Barney has been on a M&A search for Proxymed since April 21, 1999. What have they been doing? Perhaps we should fire SSB?>>>

I don't think we have sufficient info to know how good a job SSB has done.

For example, SSB could have concluded that PILL's intrinsic value is likely to rise substantially on its own over the next 1-2 years, in which case it would not be in PILL's interests to sell out now at likely current buy-out prices.

In addition, I consider the stock of some Internet healthcare companies to be potentially "funny money," which could decline in value. Note that Healtheon shares are down 60% from their high of a few months ago. The intrinsic value of the currency of an acquirer is likely to be of special interest to insiders who hold a lot of shares directly or indirectly (via options) and who are likely to be bound by lock-up periods in the event of any buy-out. Management of PILL generally make modest salaries for their positions -- their pay-off will come from appreciation of the shares, either reflecting the growth of the business or from a buy-out or both. So they are going to be focused on the long-term value of the stock, and not on making the stock pop tomorrow via a buy-out offer which might not reflect the long-term value of the company.

Best O'Luck!

Tom
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