I'm new here too and trying to find out the same thing. Looking at your profile, do you work for Quantum? Illiterate investor??
Anyways, someone posted here that SSI has been doing about $80M/Q in sales. This is about 2X 2 years ago. The same person said SSI has been valued between 1.5-2B. So, that is a price to sales ratio of about 5-6. Not cheap, but not outlandish either, so let's say that is reasonable, hence SSI would have a value of $6-8 per share.
The real Q is what happens to SEG? Here are a few choices:
a) nothing, they won't really miss $320M of revenues and the associated profits, so price stays where it is (~$25 now)
b) SEG prices fall in line with QNTM, which sells for about 2/3 of SEG based on sales over the last year or the last quarter, so SEG falls by $8.
c) something in between.
As usual, when in doubt, choose c. My guess, to get some reaction here, is that SSI would be worth the equivalent of $7/share and SEG might drop a buck or two but that's it. My projection would be that if the did it today the shareholder would benefit by about $5.
OK thread, please enlighten me. It's in all our interests to try to quantify this.
Here's my question. Since everyone knows SEG is going to spin off SSI, why isn't it already in the price, or is it (b) above?
Stuart.
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