Arbitrage Plays Message Board

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Strategies & Market Trends : Arbitrage Plays

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To: Keith J who wrote (138)	1/5/2000 2:08:00 AM
From: Brent Hogenson	of 376

Here is an interesting play: Segate or SEG is the largest manufacturer of Hard disk drives, which is basically a commodity market with low margins. (however increasing bandwidth is going to increase demand for storage so the growth could take off at anytime) SEG market capitalization: 224,100,000 shares outstanding (fully diluted)* $42.18 (Tuesdays close) = 9.452 billion. SEG owns: 85,000,000 shares of VRTS * $130.31 = 11.076 billion 5,000,000 shares of ZOOX * $44.44 = 222 million 5,000,000 shares of SNDK * $89.62 = 448 million and 35% of dragon systems which will go public shortly. My point is SEG has very little debt (TOTAL liabilities - current assets = about 500 million) and their ownership of stock of other public companies exceed their market cap. If you liked Veritas software you would be better off buying SEG, you would actually get more stock dollar for dollar. Plus you would get the SEG company for free which is a profitable business.

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