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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: llwk7051@aol.com who wrote (3455)	9/21/1999 4:28:00 PM
From: still learning	Read Replies (1) \| Respond to of 4467

True, but it could soon be $70. Since I know you've held SFE for a while, you may remember when it was simply a back-door way to own NOVL. In fact almost all of its NAV when I bought it was NOVL. And you were getting the other 20 companies for free. I think if ICGE makes and holds its gains, (It doesn't have to go to $150, just hold at $100) and the fear of the BK crash subsides, then SFE will find a way to follow it up. I myself am in the skeptics camp right now -- is ICGE really worth that much? Is CMGI? Is eBAY (no, IMHO). That said, SFE may find a powerful stabilizing force after PacWest Telecomm, which is IMO one of their very best offerings -- this will be a stellar company. If SFE has a non-inet home-run, it will remind people of its pipeline of quality IT companies. I believe SFE is at a crossroads. As MP said, it will not likely suffer as much during an ICGE meltdown, nor will it track exactly to ICGE gains. But, after pacWest, we will likely be at a substantial discount to NAV and that will not last. 'since the filing is for a $125 mm IPO, and I assume they'll offer about 10% ofthe shares, I guesstimate the initial mkt cap. (at the IPO price) will be $1.25 B and think this is conservative. Since SFE owns 15-16% of the company, probably more like 12% afterthe offering, they add at least $120 mm to NAV, and probably more like $250-300 after the IPO (assuming it doubles). Granted, lots of assumptions, and that's only $4-8 shr, but that doesn't include the "dividend" value (say $1.00 to $1.40 per share). In other words, if you own 100 shares of SFE worth $7,200, and you get to buy 10 shares of PACW at $12, and it goes to $24, you get a 1,200 dividend on a 7200 investment, or about $1.20 per share. Allowing for the plus/minus of offering price/post IPO value, I get $1.00+ I see PacWest adding more than value to the SFE share price, as it would then be hehind SCAI and TLAB, but possibly ahead of CATP as a holding. The more $100 mm+ holdings SFE has, the better (I always had a problem with CATP when it dominated the portfolio) The ICGE dominance of the portfolio cannot be changed in the short run (lockouts, restricted stock, etc.) but the relative value of the "others" can be increased thru more IPOs, and strong performance of the underlying public companies. As always with SFE, it will be their collective performance which drives (or dives) the stock.