Ed,
"Then question then becomes, if the stock was so good why are the stockholders selling. I can probably give you one reason. Both the insiders and, especially, Seagate probably needs the cash."
Seagate has over $2billion of cash, even counting the last 2 disastrous quarters. Their operations keeps throwing off new cash, more in fact than they can use profitably in the drive business alone. The only reason they would be selling is if they believe the stock is outrageously priced, or perhaps if they want to balance some of their short term hits (e.g., both the Thai currency hit and the lawsuit judgement against them) with some gains, effectively not paying taxes on their capital gains.
But, contrary to what some others on this thread have said, I still think that it is possible that Seagate would finally buy all of SNDK. They have been looking for other businesses besides drives. They are already in software, perhaps they will stay there, and forego yet another brutal business like flash. But I wouldn't bet against it entirely, although they are obviously preoccupied right now with their other problems, and so wouldn't try anything until those problems get straightened out. |
