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Technology Stocks : Digital Island,Inc - (Nasdaq- ISLD) -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (450)	10/26/1999 6:27:00 AM
From: Joseph Waligore	Read Replies (1) \| Respond to of 1884

Trying to figure out valuation: Before Sandpiper, 35 million shares of ISLD was valued at around $22-24 a share for a market cap of about $800 million dollars. Sandpiper added 28 million more shares. Now there are about 63 million shares of the combined company. At current prices of about $40, that means the combined company has a market cap of $2.4 billion dollars. Subtracting the pre-merger ISLD value of 800 million, that means Sandpiper is now valued at 1.6 billion dollars. (One thing to keep in mind is that Sandpiper has more than 28 million shares because it has its 28 million shares plus the 35 million of isld that it is pulling up in price.) At $1.6 billion and 63 million shares, Sandpiper (plus the synergy with ISLD) is valued at 25 dollars a share. AKAM has 91 million shares. It is hard to compare AKAM and Sandpiper but Briefing.com yesterday saw AKAM as the market leader with sandpiper as second, but briefing also says that AKAM has no significant competition. Who knows what is the proper valuation between AKAM and Sandpiper but let's give AKAM as the perceived leader twice as much market cap. At AKAM at $50 a share, it has a market cap of 4.5 billion, which leaves Sandpiper undervalued at only 1.6 billion. With AKAM at $100 a share, it has a cap of 9 billion, and Sandpiper can grow to a valuation of 4.5 billion with a price above $80 a share. Now that Sandpiper has the synergies of ISLD with it, it may be worth much more than half of AKAM. It may even be stronger than AKAM, though AKAM has the sexiness of MIT and Tim Berners-Lee, and the deal with CSCO.