What's the ratio ... # of warrants per share? And if you have the info in front of you, what's the normalised delta?
I'm with you on the AOL read. Saving myself some time, here's my long-ish response to a private email, fwiw. (apologies to Yamakita and other SIFY holders)
>>>>
from 90 to 60 and may be further down to as you say to 55 or 50 says lot . certainly most stocks are
attractive at some price
>>>>>
almost every stock in the internet space including aol have gone thru these sharp downward moves and sprang back rather rapidly. the spring back may not be as rapid this time (or it may, hard to say) but the fundamental story got better, the price moved south. i wouldn't touch sify today at 50% from highs. there are haircuts and then there are haircuts....... this one looks very attractive. it's not always a good idea to read into prices that the "market" knows something..... sify is just one example that the market in the aggregate always tells about it's own fears and mania first and then about any underlying issues.... the underlying issue here is case/levin forced the market to look at the reality of the internet (you must sell something and have something to sell) and they're not liking it, they prefer airy-nothing dreams.....but they will come around....same issue will dog yahoo and all other internet stocks even without any acquisitions. a huge digital platform the size of many countries, with a huge library and a record of execution. time-warner multiple is irrelevant and not valid. value of media holdings is simply a function of distribution constraints. in two years time you can watch tw library from hyderabad or vijayawada or even maybe kavutaram. on demand. that is the basis for evaluating potential leverage. area of coverage expanded from north/southeast US to the entire globe. the same household can watch different programs on the same pipe at the same time. on demand. and everything else besides....all the print and other cnn crap that came with it. and i should value this marginally higher than dumb old cable and corner shops? manhattan has 1.2 million inhabitants. tw-cable has 5-6 pay-per-view channels, specific movies at specific times. all 1.2 million are restricted to those same choices. actual demand is constrained by this limited, restricted choice. conceptually this is like blowing apart the licence-raj, all the constraints on demand and supply go out the window. if you start thinking of aol as a totalitarian country that tells it's citizens what they can and cannot buy, you get some idea. they do not actually tell them what they can or cannot buy, but in terms of "directed choices" and "convenience" it amounts to the same thing. i stick with microsoft windows because of a lot of intangible network and convenience effects. if you read orwell's 1984, this aol-tw is "Big Brother" taking shape. everything is articulated in terms of individual choice but the reality is quite different. the choice is constrained by what's handed out in available options. you have the choice to die by lethal injection or hanging. that you choose "freely" between the two is a benign myth that glosses over the absence of other choices, all possible options. but that's another story. the point is you had one set of options and constraints determined by the limitations of geography and technology. with the merger the choices have expanded dramatically. exponentially. and nobody has the numbers, yet, to estimate demand. they're using the old metrics mostly. and adding an arbitrary premium to it. a small one right now. that premium will continue to be arbitrary for some time. and when the mood lifts the fact that they do not have any way of valuing it properly for some time will prompt them to err on the side of caution and buy some aol, 'just in case'.
aol was valued at 3k+ per unique user. what was this number based on? that somehow wasting time in chatrooms and downloading dirty pictures was a 'valuable' activity? now you have something that will enable those numers to be realised. nobody likes to be woken up from a pleasant dream. reality can never quite compare to the limitless possibilities of dreaming. the reality of waking up to aol+tw, however, is not as bad as it seems. the shock has to wear off. this is a visceral reaction where people are mistaking the reality of tw as the reality that they're waking up to, waking up to another version of the "old economy". i think the reality is vastly different. i could be wrong, but then modesty has never been my strong suit so i'll settle for - 'i doubt it'. case and levin might have done some of greenspan's job for him.... the irrational exuberance in internets now has deal with tangible nitty-gritty reality. the ones with a record of execution are the ones to watch. as always. a major risk is the record of execution gets muddied by personality conflicts. with citibank in the background, there's no reason to suppose that these two cannot pull it off too. the stakes are high enough, and both have egos inflated enough, like ballons, to fly. let's see......
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