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Igor, Here's my take on the takeover scenario. Long term investors don't want it, short term investors want it. A premium is always sweet for a short termer but the dilution, lack of synergy, lower growth, and less focused management of the acquirer generally hurts rather than helps a good company for fundamentalists who like this company. The question is whether one thinks FORE is a good company or at least a better organization than the acquirer. A couple of years ago, if you were betting on ATM, you would've owned FORE, Stratacomm and Cascade. Stratacomm investors converted to CSCO and were rewarded by CSCO's success, Cascade investors converted to ASND and lost well over 50% of their equity very quickly. FORE stayed solo despite being the most desirable acquisition on the block. Now that ATM is about to enjoy its cash cow period in its lifecycle, FORE needs an acquirer even less. FORE doesn't need capital, is currently not losing market share, and can sustain the growth that its valuation dictates staying solo. FORE is free to make and break alliances as the changing market dictates. Like yourself, I'd welcome a 30% premium anytime but if the acquirer is a company I didn't like (and let's face it, we as investors hate more than we like), I'd lose as much in taxes cashing out the position. As a long term investor, I think FORE will make more money for me over a 3-year, 5-year, or 10-year window staying solo. |
