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Non-Tech : Tyco International Limited (TYC) -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Tomatohead who wrote (959)	12/9/1999 9:38:00 PM
From: Mang Cheng	Read Replies (2) \| Respond to of 3770

From the street.com "A Sign of the Top, or a Sign of the Times?" By Aaron L. Task Senior Writer 12/9/99 9:03 PM ET "Tough Love" "Speaking of the strange, wacky and oft-profane times in which we live, Tyco International (TYC:NYSE) settled down 22.1% to 28 1/4 today. Over 115 million shares traded, making it the heaviest action for a single stock in NYSE history. As you've doubtless already heard, the Securities & Exchange Commission has begun an informal inquiry into the firm's accounting practices. Tyco officials reiterated their belief in the firm's accounting, as reported by TheStreet.com/NYTimes.com joint newsroom. Meanwhile, several sell-side analysts reissued positive comments about Tyco, much as they did back on Nov. 11, when the stock closed at 43 1/4. Today, Merrill Lynch reiterated its long-term buy rating and Bear Stearns reiterated its buy rating and $65 target. Salomon Smith Barney reiterated its buy recommendation but lowered its 12-month price target to $50 from $65. All three firms have investment-banking relationships with the company. Given my proclivity for facetiousness, it'd be easy to say the analysts are simply sticking by the old mantra that if you like Tyco at 43 1/4 (much less at higher levels) you've got to love it at 27 15/16. But that, I fear, oversimplifies things. James Samuels, managing director at Banc of America Securities, which has done underwriting for Tyco, acknowledged in a research report the SEC inquiry is "materially different" than an individual raising concerns. While many peers lauded Tyco for disclosing the SEC action -- something it was not compelled to do -- "the SEC, because it's a public watchdog, may [now] be forced to find something wrong," Samuels said in a phone interview. Because of the subjective nature of accounting rules, the analyst is confident the SEC could find something awry in Tyco's books if it wants to. So here is an analyst who doesn't have his head in the sand (or where the sun doesn't shine). Yet, Samuels maintained the strong buy rating that's been intact since long before David Tice's report first sent the stock careening in mid-October. "Even if the company is found completely guilty, there still remains some intrinsic value," he said in defense of that stance, estimating Tyco is currently trading at a 30% discount to its breakup value. "And if the inquiry doesn't turn up anything material, the stock will go back up considerably higher." Portfolio managers' unwillingness to hold downtrodden stocks at year-end is an "additional pressure," he noted, forecasting Tyco will "find a reasonable floor" in the mid-20s and rally come January. Maybe so. But how does that justify riding the stock all the way down? Samuels and other sell-siders characterized the SEC investigation as not unexpected (although I'm sure Tyco shareholders would have appreciated a heads-up) and he tacitly admitted they perhaps overlooked the risk. But given the company's "growth rate, quality of management and earnings projections," he felt the stock was extremely attractive when it first came down in the aftermath of Tice's report. And if he liked it then...

To: Mr. Tomatohead who wrote (959)	12/9/1999 11:28:00 PM
From: HighTech	Read Replies (1) \| Respond to of 3770

>>Sorry for the pain to those who have been long for a long while, but unless you sold, you haven't lost money.<< Oh really? In fact one has lost. This idea that only if one sells does one "lose" is nonsense.(Note please that I am critical of the idea not the author of the idea). An investor has many choices. If an investor who owns TYC bought it at say $40 per share, he/she has a choice to either hold it or sell it and put the money in a more attractive investment. There are advantages to this. Not only will he/she get a tax benefit from the loss taken, but if another investment moves higher faster, then the cash management decision to sell would be a superior one. You are where you are. If your stock is worth $28 and you own 1000 shares bought at $40, you have today $28,000. Since you are at point A.(today) and you want to get to point B.(the future), you have to ask yourself which investment will get my $28,000 to say $50,000 faster? The fact that you are in a losing position does not change the fact that you only have $28,000 today and a choice as to how to employ those funds. Myself, if I thought I could make more money putting the $28,000 in say, AMAT, or say CSCO(rather than holding TYC) over a future investment holding period, it would be stupid for me to hold on to this silly investment just so that I don't have to take a loss. Take the loss, it will provide more than one year of tax benefits and meanwhile you can put the only money available NOW to work for you. Preaching done, HiTech