Deborah;
<<I am long Seagate and read your thread with interest whenever I get a chance.>>
Congratulations. Whether you are prescient, and bought in the low to mid 20s, or are simply waiting to get well like many others here, you must be pleased with the recent run up.
Robert has offered you the simple math answer and anything beyond that is pure conjecture, a caveat to the following comments as it were.
The real question in my mind is what does Seagate intend to do with the Dragon Holdings? In other words Seagate, like any investor should do, will be evaluating potential returns versus alternative investments. Inasmuch as Luczo was the guy that financially engineered this particular holding for Seagate (as Seagate's business development VP) then I doubt that we will see a divestiture of the holdings even at the high range of any potential IPO price. Far more interesting to me is the question as to what synergy might the Dragon products bring to the Seagate universe of products and business model. For example: Is speech recognition the next killer app as some would have us believe, and if so, how might it be used in some of Seagate's channels to strengthen their data storage business in the face of severe competition from the likes of IBM and Fujitsu? I might be barking up the wrong tree and it may be as much an "arms length" investment as, say, the money I have in money market instruments. I do not think so, however.
The most exciting aspect of Dragon's line up of products is not the box you can buy at Fry's or Best Buy which many of us are familiar with, and perhaps have even purchased and played with. (Mano comes to mind here). The real excitement in Dragon, IMO, is in their potential OEM business as speech recognition has potential for inclusion in many different kinds of products, including non-traditional PC productivity applications.
All of the above is why I mentioned in a previous post that I will be watching what SEG might say about their Veritas and Dragon holdings very closely during the upcoming CC. In those comments, if offered, we may get a glimpse of the new vision that the company is likely cultivatng under the Luczo regime. I hope so. Seagate (and Luczo) has had since July 21st last year when they made the startling announcement about Al Shugart's departure, to develop that vision. To be sure, they have been busy mending their business, including the continued reorganization and intense cost reduction programs they have undertaken. But it is time to hear about the future from Luczo IMHO.
I have to say that SEG's recent stock price appreciation has done me awfully well and I am pleased. But I do not see that they have particularly outperformed the segment since the start of renewed interest by investors in disk drive related stocks.
techstocks.com
Best,
Stitch
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