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Technology Stocks : WAVX Anyone?
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To: Norman Klein who wrote (5759)3/2/1999 4:21:00 PM
From: andrew peterson  Read Replies (2) of 11417
 
How does WAVX withstand an HP buyout offer? Simple, really, they just vote against it. Insiders holding Class B shares (with 5 votes to a share) will make it difficult to do it without the company's supporting the deal. The Spragues have talked about this in one of the interviews they did -- I believe it was the TWST interview. (I'll try to dig up the relevant excerpt so that we can look at it.) Now I take it that what you're suggesting is that HP is now or will in the future strong-arm WAVX to sell the company in exchange for financing. They might try. But if the Spragues aren't interested, I believe that they'd probably be hurting their own company by forcing the issue.

Right now anything we say on that subject is pretty much speculation, but in my gut I just don't see it happening. It's true that WAVX's finances suck, but it's also true that they've acknowledged that they have many sources of possible financing. In other words, they could say no to HWP. Of course that might mean Reg D financing, which would not be good for shareholders -- but I'd probably even take that over a buy-out right now. Another question is whether or not HWP would actually WANT to buy WAVX. There has been in the past quite a bit of talk about the possibility of IBM buying out WAVX but IBM seemed to suggest that it was more in their interest to have WAVX functioning as an independent entity. One other point is that the dependency is not a one-way street here -- HP also needs WAVX. We have the patents and the devices that anyone who traffics in digital commerce needs. We can say no if we want to and in some ways it's not in anyone's interest to alienate us. I think (I hope) that our intellectual property gives us more clout than you're allowing.

But who knows. You could be right. But I certainly hope not. Wavx in a few years will be worth a whole lot more than the buy-out price in the next few months.

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