OT--->
Art,
Not true.
Even without their recent stock sales, they would have around $900 million cash, net of debt (around $700m of debt, $1.6b cash). Sandisk isn't even their largest outside holding, Veritas is by a long shot. And they will not only get $230m or so from Sandisk sales (counting the PEPS trust), but a little more $500m from selling about 10 percent of their Veritas stock (already done; since then, Veritas has climbed from the low 50s to the mid 60s last time I checked last week). It is true that they will write off over $200 million next quarter to consolidate their software division, so that future Veritas stock sales can be done with just Seagate BoD approval. And they will probably have some other writeoffs as well, since their drive business has been so shabby of late. However, their balance sheets is one of their weapons, and is clearly the strongest of all the DD sector companies. They will, it is rumored, do a takeover, and these stock sales are preparatio for it, either by using the cash to take over the company, or to by back their own stock to offset any dilution from issuing stock. Or, I would also guess since they have the authority to buy back $600m of their own stock already, they are buying their stock in the open market to get its price up and make any takeover cheaper.
Sorry to be so prolix.
s. |
