<<Short interest is pretty much a meaningless figure anyway, since most of the shorts are related to the HON arbitrage anyway and will vanish when the merger consummates. >>
Kevin that's true, although I don't think there will be 0 short volume on GE when the deal is closed
My conseco analogy is extreme, I'll admit.
<<To put it another way, GE paid about $45B for HON, plus HON's $7 in debt, call it $52B. That's about $5.20 per GE share. GE's been knocked down something like $9 since the deal was announced. From that alone it can be argued that, regardless of how much you think GE overpaid for HON, the overpayment is already reflected in GE's share price. >>
You can't assume that the drop was due to the acq news. There' no way to know if any of it was. The mkt has not exactly been rosy of late.
<<Now if accounting irregularities turn up at HON, >>
there's no reason to think that is the case, imo.
<<Or if you're going with the trendy thought around here that now that the Naz has dropped 50%, it's the Dow's turn to do likewise, that's a completely different set of arguements. >>
Nope I just think this is a bad move for GE and nobody was willing to stand up to Welch. There's a heck of a lot of low-margin, lowest bid type business in Hon. And the Hon merger with Allied Signal was not going all that great. The "efficiencies" adn "scale" just weren't materializing as planned. And soon GE owns it.
I give lots of credit to the ceo of UT who bid for Hon but walked away when he saw the price go up 23% or whatever. I think he knows the value of Hon a lot better than Welch/GE does.
<<is capable of taking down Welch's entire empire. >>
I don't think it will take down GE- I just think GE will regret it.
Victor |
