SDL, Inc. [Nasdaq: SDLI] Message Board

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Technology Stocks : SDL, Inc. [Nasdaq: SDLI]

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To: tcd who wrote (3598)	12/6/2000 11:00:08 AM
From: Gerald Walls	Read Replies (1) of 3951

Then came some info on this board that the JDSU merger was equal to about 243 for SDLI. My questions are: would the stock price go above 243 and if did why? This was no secret and has been discussed many times before. The exchange ratio (as I recall) is 3.8 JDSU for each SDLI. Right before SDLI stops trading and is exchanged it should trade at 3.8 times whatever JDSU trades for. Until that time it should trade at a (normally-declining) discount representing both risk and required return by the arbitragers (those who buy the company being acquired and short the company doing the buying in order to lock in the difference). 2. If for some reason the SEC does not agree with the JDSU merger, then, there's a greater likelihood that SDLI would rocket back to its old high. Is that right? Based solely on technical factors the opposite would happen. Those who shorted JDSU and bought SDLI to lock in the takeover premium would have to dump SDLI and buy JDSU, and would probably get caught in a short squeeze.

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