General Instrument Corp.'98 (GIC) Message Board

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Technology Stocks : General Instrument Corp.'98 (GIC)

GIC 29.42

+0.7%

Jan 2 9:30 AM EST

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To: Daniel Fisher who wrote (198)	3/29/1998 12:23:00 PM
From: kech	Read Replies (1) of 615

Daniel - I like the Sony/Java article. Just because there is $$$$$ in a business is usually not sufficient to justify an acquisition. I.e. there is $$$$ in making movies too. But that acquisition was not successful - it seems like you agree with that right? Usually the argument has to be that the acquirer can do something with the acquisition that they could not do as a supplier or in an alliance. Maybe that is true here for Sony/GIC maybe not. I am a doubting Thomas type. What I was trying to point out is that GIC would also bring a bunch of baggage to Sony that may not be related to what Sony is good at doing. Installing Cable Infrastructure might be one of these just as making movies was. What does Sony get that they would not get out of say a Joint Venture? Keep in mind, Sony got into a JV with Qualcomm to make cellular phones using Qualcomm's new CDMA standard. The circumstances seem somewhat similar. Though one can argue that they didn't want to buy Qualcomm because they didn't have much to add in the cellular standard end of things - they just wanted to make the phones. Here they don't have much to add with digital compression etc. or with supplying U.S. based cable companies. They are good at retail distribution and making cute boxes. Maybe the opportunity to make 15 million cute boxes based on GIC's contracts is enough to justify buying the whole thing. But it would seem that they get the distribution benefits with the current alliance. If they want to also make the boxes - why not JV? In any case - I would be happy with $40 but would take $35. If there is a buy what price? Also, when?

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