Compaq Message Board - Msg: 12745950

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Technology Stocks : Compaq

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To: Lynn who wrote (77272)	2/1/2000 3:59:00 PM
From: rupert1	Read Replies (1) of 97611

Lynn: Compaq has cash of about $3.5 billion, investments of about $6 billion. It has 1.69 billion shares. So we are talking about cash and shares equal to about $5 per share. Total book value of COMPAQ is about $7.50 per share. Given all the talk about the value of the CMGI and other holdings, it is good to realise what a modest amount this translates on a per share basis. If HWP or any wanted to take over COMPAQ for $45 they would more than compensate shareholders for their value. But why should any company want to buy COMPAQ for its holdings when they could get the same holdings on the open market. I suspect that any takeover would involve a pre-agreement to sell the shares. Then we would see what they were really worth. I believe a majority of COMPAQ investors would accept $45 (with gratitude) and would not care even if the acquirer was getting a good deal on COMPAQ's cash hoard or investments. But $45 would be a premium. COMPAQ's modest projected growth rate for this year, would not attract a high premium. One of the main reasons given for people laughing off the rumour a week ago was that they expected COMPAQ to go to $45 soon, anyway. After earnings they are not so sure.

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