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Technology Stocks : PairGain Technologies
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To: Doug Bean who wrote (25348)8/12/1998 9:28:00 AM
From: Bobby G.  Read Replies (1) of 36349
 
Doug,

Here's how I see it. Other opinions welcome.

PAIR would probably be sold for no less than 4x sales. For '98 PAIR should have sales of about $300 million (first six months it's been $146MM). At $300MM we're looking at $4.29/share in sales.

$4.29 x 4 = $17.16/share or $1.2 billion. But wait. We have to account for PAIR's $200M in cash and short term investments. That brings the value up to $1.4 billion. $1.4 billion divided by 70MM shares is a nice even $20/share.

My opinion is that PAIR's management could get a few more dollars per share out of the buyer based on the fact that a) the worst seems to be over for them and they are well-positioned for the future; b) they are being sought by a number of major companies (LU, NT, ALA, maybe even CSCO and others).

Just my view. Others welcome.

Bobby G.
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