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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: John Rieman who wrote (46785)	10/27/1999 11:42:00 PM
From: BillyG	Read Replies (1) \| Respond to of 50808

Yahoo analysis, together with growth valuation of the CUBE semi shares: messages.yahoo.com Valuation by: kedjad 10/27/1999 10:15 pm EDT Listened to conf call ..thoughts on valuation : No idea of value of HLIT, but if @ 60, .54 share is $32.40, if @ 65, .54 share is $37.80. On semi business, in conf call new CEO said current years semi sales would be 240-250 mil, that sales were accelerating, and that growth in excess of 40 percent should be expected for several years. Also new semi co would have over 150 million in cash at spinoff. Also confirmed that gross margins should be 58 percent and net operating at 38 percent. using 40 percent growth on about 250 mil in sales results in sales at 490 mil in 2 years and EPS of about $4.00. With P/E of 20, value of semi co is 80, if P/E is 30, value rises to 120. With expected current years EPS in semi of $2.05, current value with P/E of 20, results in current value of semi of 41. Added to 32-37 value depending on share price of HLIT, I arive at current valuation of 73 to 78, with good prospects for even highe P/E in equation if semi business will be growing at over 40 percent.

To: John Rieman who wrote (46785)	10/28/1999 4:37:00 AM
From: Trieu	Read Replies (1) \| Respond to of 50808

Tomorrow should be very interesting. One thing is for sure -- volume will be huge. I expect traders/arbitragers to be all over this deal. Don't rule out other bidders for Divicom. I wonder if management had thought about spinning off Divicom. They probably wouldn't have gotten this kind of valuation with a spinoff/IPO, but there's not telling with the current IPO market. I have been involved in other merger/acquisition deals and here are some thoughts. You need to keep in mind that shareholders still have to approve the deal. This deal will not go through if Harmonic's stock tanks. If that happens, I would bet that another bidder enters the picture now that Divicom is "in play". As for potential buyers of the semiconductor business, don't forget Texas Instruments. It's got plenty of cash, possesses more highly valued stock price, and a desire to acquire companies. It funded Cube early on with venture capital. In the past, it has been rumored to acquire Cube. Now that it's purely a semiconductor company, it makes even more sense. Any thoughts? Anyone awake?