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Technology Stocks : Seagate Technology

STX 258.21

-1.7%

Nov 14 4:00 PM EST

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To: William Epstein who wrote (6064)	10/23/1998 1:26:00 PM
From: Robert Douglas	Read Replies (1) of 7841

William, My fear is that the stock may go down, as low as, 13 or 14 before it starts to rise. Working from their July 3, 1998 balance sheet SEG has working capital over $2.2 billion, of which $1.7 billion was cash and short-term investments. Subtract long-term debt from working capital and you have $1.5 billion or $6.3/share. At today's prices each SEG share has $5.7 worth of VRTS stock. Together these two items are worth $12/share. At $13 or $14 this would be giving the disk drive business away for free. Not that markets haven't been know to go to ridiculous extremes, but I think your fears are overblown. I am personally becoming quite positive on the company and thinking that a rally to the $30 area is very possible. My feeling is that the worst is over since the inventories that have plagued the PC food-chain are mostly worked down. But what do I know, I'm just a boring long-term holder of the stock? -Robert

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