To sam, radames, howard and friends of BCST, some angles:
YHOO 0.85/share conversion ratio is just a rumor. Problem is, it tends to look "official."
First, we can't even assume that YHOO will be BCST's acquirer. The potential list of suitors is as long as your arm, and there are some dark horses out there, not to mention AOL. TWX? CBS? ATHM? Paul Allen/Vulcan Ventures? Bertlesmann? Softbank (maybe in conjunction with YHOO)?
YHOO closed Friday at $171.375. Using a conversion ratio of 0.85 per YHOO share, you get a value of $145.66875 per BCST share. Call it $145.625. This figure is well above the $110-130 price range that has been circulating in the press, and slightly above (buy-side) analyst Steve Harmon's recent minimum valuation of $138.44. It is, however, somewhat below my own expectation of a minimum takeout value of $150 per BCST share, or about $5B (assuming a stock deal).
Importantly, I believe the current BCST takeout price range circulating in the media could be a *leak* whose purpose is to lower expectations and prevent any LCOS-like controversy when a deal is imminently announced. That way, the acquisition can be presented as a material premium over BCST's current trading price and create terrific "buzz." If BCST and its acquirer can shake off the LCOS blues, the Net sector will rock! (Incidentally, not worried about LCOS, either; it will work out. Short LCOS puts.)
So the 0.85 per YHOO share can only be the by-product of assumptions and has no direct credibility. Still, a deal could work out to 0.85 under certain circumstances.
I have no special knowledge of any facts and no access to inside information. I could have been wrong about BCST all along. I could be wrong now. But I'm putting my money where my mouth is, so you can conclude I have...conviction.
Just one more thought. At Friday's closing price of $110.50, BCST is discounting the low expectations proffered by the media. As recently as Thursday after the close, an analyst appearing on CNBC (Bruce Smith of Jeffries, I believe) called BCST a "trophy." That's why, at $110.50, it's a "buy." Nah, it's a *gift!*
BAM |
