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Technology Stocks : Seagate Technology - Fundamentals
STX 286.22+0.3%Dec 26 9:30 AM EST
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To: Sam who wrote (1872)6/14/2000 12:55:00 PM
From: Gus  Read Replies (1) of 1989
 
Nice touch, Sam.

"Yon Cassius smiles too much."

And good points. I really wonder who's bidding up Veritas at this point.

If the deal does through, as currently structured, about 107 million shares will change hands as the value-oriented investors of SEG dump their Veritas shares in search of other value plays.

If the deal does not go through, then we already calculated that each $5 increase in the cash portion amounts to something like $1.1 billion -- turning a clever LBO with no debt required into a scary one with real debt -- so sweetening the deal will most likely involve removing certain stocks/cash from the Veritas package. That still leaves the issue of 107 million shares (more or less) hitting the market in a relatively short period of time.

In either case, Veritas will again look like one of the best-looking free rides in years, on the short side, once the deal closes. Not unless there are enough people that genuinely believe that Veritas is worth between $75-100 billion -- implying a limited upside of 50-100% -- in today's market, especially with all the rapid changes in storage networking.

Then there are the 12(?) lawsuits, including one demanding an honest to goodness auction as relief, so this one ain't over till its over.
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