Stitch:
I am a long term lurker on this thread and the other dd threads. I want to say that I admire you and your postings greatly both on dd and asia. Thank you for your work. Not only the technical expertise you bring, but very sane thinking brought forward positively but firmly when needed. I loved the "head in a jar" post on wdc thread a ways back. Also to others on these threads Marty Van Acker, La Traguhs, and others a fine job. I will say I am not sympathetic to the Richard Ney philosophy. Reading his books years ago, I found them about 5% fascinating and 95% useless, discardable, conspiracy theory. But that's mho.
Anyway... There has been some questioning in this direction previously re: valuation of Dragon Systems stake. However, I would ask you or the other experts to attempt a valuation by pieces approach of SEG. It seems to me, starting a sketch:
with Market cap = roughly 6.4b
1. cash = roughly 1.9
2. vrts stake = 1.6? (i am not clear on the math. does one look at vrts market cap and apply 35/65 fraction to it, as vrts will issue new shares for the 35%?)
3. dragon stake = 1.6??? (i have no idea here. I am only putting a figure out there which is similar to the vrts stake to ask a question. the thoughts i do have are a. dragon is not only private, it is very privately held. i understand that the owners of dragon are just philosophically not about going public. however, luczo, with his investment banking background, seems astute at making value visible to enhance shareholder value. on the other hand, dragon is well respected in the hot area of speech recognition, which has probably a real future, but also has the possibility of really appealing to investors' imaginations. also, does the vrts deal rule out the seg software spin-off? would it be possible for seg to spin off a company with the vrts stake, the dragon stake, and the remaining seg software assets?)
4. dd business notes...seg is number one independent dd. yes, they have been slow to market. yes, the business, is tough. but seg has the resources and staying power, and recognize their problems and are working to improve them. one thing impresses me is the investment in emerging and future technologies such as fibre channel, optical (quinta), etc. also of value: flash memory and tape businesses.
In summary can someone produce an attempt at an algebra of adding up the pieces. I do worry about the dizzying height of the visible large cap stocks impairing the recovery. Also, in the nature of disclosure, I am not in seg at present, although have recently held a stake.
Thanks. |
