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Technology Stocks : Seagate Technology - Fundamentals
STX 255.96+7.7%11:43 AM EST
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To: Struggling Investor who wrote (1840)5/17/2000 4:24:00 PM
From: Mark Madden  Read Replies (2) of 1989
 
Solomon Smith Barney (SSB) came out with a lengthily report recommending SEG stockholders accept the deal. Their rational is kind of a stretch. They claimed because the deal was saving SEG stockholders about 25% of VRTS after tax value ($22 at the time the deal was proposed) that stockholders should consider the deal worth $27 for SEG stock ($5 +$22). They go on to explain $27 is a good price for SEG now because there are no potential buyers and stockholders need to realize you can?t get full value for your stock when there are not buyers for your company. They seem to miss the point that stockholders may have owned SEG stock because they felt it was undervalued. It would be worth more later. They must have assumed all stockholders were anxious for the management to sell the company because stockholders didn't want to sell stock on the open market. Actually SEG had more value to the stockholders than it had on the open market or the stockholders would have sold.

I did not want to sell SEG when the valuation was low. I prefer to sell when the full potential is realized and value stocks come back into favor. I would however, cash out on VRTS at any time. I still believe there are ways for SEG to avoid taxes on VRTS without selling the company to the BOD. I will vote "no" unless something changes big time. I would rather take my chances with a new management team that I could trust.

Regards,
Mark
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