Williams Communications Group - WCG Message Board

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Technology Stocks : Williams Communications Group - WCG

WCG 349.92

+1.4%

Jan 23 4:00 PM EST

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To: Bernard Levy who wrote (255)	12/16/1999 4:38:00 PM
From: MangoBoy	Read Replies (2) of 609

<< At current prices for WMB ($29) and WCG ($26 3/4), and assuming 0.85 share of WCG is contained in each share of WMB, one gets $22 1/2 of WCG for WMB share, which means we get the energy company for only $6 1/2. >> Good find. Looks like a nice deal if you think the market will come around to valuing WMB assets "correctly". I don't follow the energy sector so I can't speculate about the non-WCG components. Does WMB pay a cash dividend? That might be added inducement to buy WMB. Has WMB spoken to their long-term plans for their WCG stake? Maybe a good compromise is to split your position between WMB and WCG. OT: The technique for creating a synthetic "energy-only WMB" looks very risky to me. It assumes the market is giving full value to WMB's WCG stake and heavily discounting all other assets. To the degree that the market isn't fully valuing the WCG stake, the WCG short is going to hurt as WCG goes up.

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