Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: RocketMan who wrote (2903)	2/13/2000 7:07:00 PM
From: Jill	Read Replies (1) \| Respond to of 8096

I did bring it up here a few times, and was studying it myself recently when COMS hadn't broken through 50 yet. It's havin a pre-PALM IPO runup and then there will be some serious profit-taking, or perhaps right before. Having never played an IPO through the backdoor like that before, I held off--even tho I agree w/ you it'll be hot and PALM is a great device. I've also avoided the ETEK play into JDSU: simply out of ignorance about arb plays. That doesn't mean either of the above are bad plays, they might be brilliant. Jill

To: RocketMan who wrote (2903)	2/13/2000 11:30:00 PM
From: DM	Read Replies (1) \| Respond to of 8096

RocketMan You are right on the point of the palm/coms deal. coms should and has been increasing in value since the announcement. However, I used a different method to calculate the value of coms. I came from the direction of looking at the market cap. I believe you need to use that in calculating the values. Now you ask why? You need to take into consideration the number of shares each company has outstanding to calculate the value that will be added to coms. Lets take this a little further and apply some numbers to the IPO. First we need to identify some of the constants, or close to being constants in this deal. The constants are as follows: coms shares outstanding - ~341M shares palm shares outstanding - ~570M shares palm shares offered at IPO - ~38M shares AOL, MOT, NOK will puchase - ~17M shares This leaves a IPO float of - ~23M shares (not many imho) palm planned offering price - $14-16 a share analyst expect palm to trade - $36 - $42 after IPO So, now on the math. Let calculate the added value to coms based on a $15 offer of palm. We need to take the total shares of palm (570M) and multiply that by the share price ($15) which is $8.5B (570M * $15 = $8.55B). Now lets divide the palm market cap ($8.55B) by the number of coms shares in outstanding (341M) which is $25.00 added value to coms. Now the major questions that needs to be asked is what is the true value of coms? We take that value and add it to the $25.00 that we calculated above. IMHO, coms is worth about ~$25.00. So this provides us with a per share value of $50 for coms. Now, we have to consider where palm might actually go. Instead of being even more wordy I have just listed it in the table below. Palm $ coms $ $15 $50 $20 $58 $25 $66 $30 $75 $35 $83 $40 $92 $45 $100 $50 $108 Keep in mind that I don't believe you will get any palm shares by buying coms options. The spin is being treated as a dividend payout, options will be adjusted in quantity and strike price. As in a stock split. Be careful of the spin, I would be out of any option before the date of record of the spin. coms will take a nose dive at that time of the spin. DM PS my hubby read your post and wrote this. :)