Netscape -- Giant Killer or Flash in the Pan? Message Board

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Technology Stocks : Netscape -- Giant Killer or Flash in the Pan?

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To: Steve Warkentin who wrote (4857)	1/28/1999 10:28:00 PM
From: Larry S.	Read Replies (1) of 4903

Stock split and discount to AOL: - 1. NSCP shareholders will get .45 shares of AOL for each share of NSCP. If AOL splits 2:1 prior to the exchange, then we will get .90 shares of AOL for each share of NSCP. 2. AOL closed today at 174 7/16. NSCP closed at 73 5/8. .45 x 174 7/16 = 78.52 78.52- 73.625 = 4.9 4.9/ 73.625 (price of NSCP) =6.6% Nscp is trading at a 6.6% to the conversion value. It is typical for a stock to trade at a discount to the conversion value, in case the deal falls thru, regulatory opposition, change in conversion ratio, etc. the closer we are to the actual acquisition, the lower the discount will be. One could buy NSCP as a means of getting AOL at a discount. One could also purchase XCIT as a way of getting ATHM at a discount. If you do so, then you are assumming the risk of the deal not going thru or not going thru on the original terms. If one bought CIEN as a means of getting TLAB at a discount, one would have gotten seriously burnt. NSCP/AOL looks pretty solid. PS I own both NSCP and AOL. Larry

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