Andrew Bary has an article in this week's Barrons on the deal, basically affirming what we were saying two years ago, that it was a heist job by SL & Co. He says that the deal prices STX at 1x sales, a "little rich" valuation for a disk drive company. Says that he hears that it will sell at the low end of the $13-15 range, but obviously, the insiders will make money even if it sells below that. He also quotes Barrons at the time as saying that the earlier deal priced the sale of the DD company below true market value. But as I recall Barrons at the time, he was one of the company's biggest boosters (he was writing The Trader column then), though I do recall one article which basically gave both sides of the story--that made it pretty easy to find a quote today which would take either a pro or a con side of the earlier deal.
In any case, this stock will likely be a trader's dream, IMHO. My guess is it will open nicely up from its offering price to allow gunslingers an opening week profit, then will trade down, below the offering price, then back up again after a few months to allow the insiders an opportunity to reap even more of their ill-gotten gains, possibly around this time next year or in Jan-Mar of 2004. |
