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Technology Stocks : CGRM Centigram
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To: David R who wrote (154)7/18/1997 5:33:00 PM
From: Red Dragon   of 333
 
Reply to comments from David R:

This assumes that one could buy CGRM based on today's price which is not the case.

Good point. The market cap does show the "theoretical" purchase price, however, although no one could practically purchase 100% of the shares on the open market at the going price.

Typically, a company gets bought for 2-2.5X earnings which puts CGRM
around 225-275M, or about $30-$35/share. If you factor in the cgrm cash, then one could buy CGRM for around $200M.

Did you mean 2-2.5X revenues or earnings? Your illustration uses revenue figures. If we used earnings figures, we would get zero dollars, unfortunately :-)


The CGRM-Lucent deal is interesting. One would assume that Lucent evaluated all of the VM companies to see who had the best cellular solution. It is puzzling that they give this huge and growing market to CGRM, and then buy Octel. Let's see if CGRM keeps this business, or if Lucent moves to Octel.

I hope you're right, but it's hard to see how Lucent would refer business away from their own subsidiary.
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