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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: tonyt who wrote (20879)4/6/1999 10:47:00 PM
From: Michael Anthony  Read Replies (4) of 27307
 
A question for longs and shorts regarding BCST and earnings:

YHOO has agreed to buy BCST for 5.7 billion in stock. If the stock tanks, they're gonna have a hard time keeping the deal together at .77 shares of YHOO for each BCST share. IMO, the deal being announced so close to earnings tells me that they expect results to be enough to propel YHOO higher so their purchase will be easily accommodated. If YHOO management knew the numbers would disappoint this quarter, I think they might have waited on this deal. At .77 YHOO shares for each BCST share, that totals 28.3 million shares YHOO will fork over.
(36.8 mill out on BCST x .77) If YHOO falls below 200, the value of BCST's deal is below the 5.7 billion figure. So you guys tell me. Would the deal have been structured as such if YHOO's management didn't think the stock would please the street and climb over 200? I don't think so. I think if earnings were going to be bad, they wouldn't have entered the deal at the time they did. It hasn't closed yet, so they'd be taking a real chance if they weren't sure. At the time, YHOO was in the 160-170's when the deal was announced. At .77 shares, 5.7 billion in value for BCST means YHOO must over 200. You think maybe they knew the street would value YHOO over 200 after earnings to structure the deal in this way?...so close to earnings? Seems to me they said, "we got great numbers coming, we can afford .77 shares of YHOO for each BCST share if we're over 200 because we'll be there when the street sees this quarters numbers".

Whaddyathink sirs?
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