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Technology Stocks : Vari-L (VARL) -- Ignore unavailable to you. Want to Upgrade?

To: Robert Sheldon who wrote (1672)	12/21/1999 10:58:00 PM
From: LBstocks	Respond to of 2702

I can't PM you. I get an error message.

To: Robert Sheldon who wrote (1672)	12/21/1999 11:13:00 PM
From: LBstocks	Read Replies (1) \| Respond to of 2702

Just to clarify, my broker did not say that VARL was getting bought out. He only said that there was a rumor floating around of a buyout at 40. He did not take the rumor that serious. He said the rumor MAY have been contributing to the price movement.

To: Robert Sheldon who wrote (1672)	12/21/1999 11:40:00 PM
From: J Stone	Read Replies (2) \| Respond to of 2702

Today's activity hints at increased institutional activity. If the volume continues tomorrow, I wouldn't be surprised to break through $31. Given recent pricing, a stock offer of $40/share would seem to be insufficient to warrant serious attention. It's not too difficult to do a probability analysis of VARL's potential 2000 earnings. Being mildly conservative, minimum EPS will be $.70 -- I'll give it a probability of 20%. I'll give 50% probability to subscriber VCO orders using 50% of single line annual capacity -- I'll ballpark those incremental earnings at $.40/share. Finally, I'll up current business sales by 30% and assume 75% usage of a single subscriber line at a probability of 30% giving EPS of $1.40. 20% * .70 + 50% * 1.10 + 30% * $1.40 = $1.11 EPS An offer of $40/share would be priced at a PE of 36 on 2000 earnings for a company that has far more upside potential than downside. No deal.