Compaq Message Board - Msg: 12277315

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Technology Stocks : Compaq

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To: Night Writer who wrote (73732)	12/13/1999 9:39:00 PM
From: rupert1	Read Replies (3) of 97611

NW: First of all, speculation would drive the stock up only to where the market thought it would be bought. Who are the suckers who would drive it to $75 if there is no hope of it being bought out at that price? Secondly, once there was a serious interest in $50, let alone an offer, the price would approach $50. Thirdly, once the offer was made, arbitrage would make a market for the stock at $49. So you could sell on the open market at $49 and not have to wait six months for the acquisition to complete. Fourthly, you could take your $49 and invest it in CMGI and in those six months it would multiply 300% (or diminish 75%). I don't know what the book value of COMPAQ is - very low single digits a share. But COMPAQ or an acquirer could raise additional cash to that which I listed by selling off divisions as going concern. Even floating them. The PC division for example. DELL might pay a few billion for the intellecutal property and the enterprise division. Of course, all this would have been much better had it not sold AV. An acquirer( or COMPAQ) could float that and raise several billion while retaining a majority interest in an increasingly valuable asset.

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