Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

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12:48 PM EST

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To: Sam who wrote (1898)	7/20/2000 1:42:24 AM
From: Tom Simpson	Read Replies (2) of 1989

<<However, it looks like there may be another little shakeout of high PSR stocks.>> Or perhaps not so little. Golleeee....even after caving to 112 VRTS has a PSR of 47....no, not 4.7, but forty seven. Once upon a time that would have been considered a rarified PE ratio, quite unimaginable as a PS ration....but this IS another era. I don't know.... If I'm holding SEG I've got some 52 bucks of VRTS (with downside potential I don't want to think about) and a very depressed disk business (with debatable upside potential). If I was an institution holding SEG I would see some balance to my risk here. If I wanted to have a position in VRTS, SEG represents a less risky means of holding one. On the other hand, the future value of SEG need not fully value the market value of VRTS (which is what drove the complaints which spawned this deal in the first place). The practical choice stockholders will face is to swap SEG for VRTS tax free and get 5 bucks for pocket money or do nothing and sit pat. What you have to wonder is whether the 5 bucks is enough compensation for the added risk associated with a direct naked position in VRTS. If I was holding SEG I would rather have the disk upside than 5 bucks I get for giving it up......but I'm not. I bailed at 56 when I thought the potential VRTS downside was just too awful to contemplate any further, and I still find that awful. It seems to me that the single reason a stockholder would vote yes on this deal is the fear that if he doesn't SEG will fall back into the condition where its market price fails to fully recognize the market price of VRTS. Anyone have another and/or better reason for checking the "FOR" box on the form? Best Regards......Tom

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