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

To: steve mamus who wrote (5230)	3/20/2000 10:30:00 PM
From: mtnlady	Read Replies (2) \| Respond to of 8096

Steve I've been following the ETEK/JDSU discussion and the spread as well. During last week's drop the spread worsened to levels it was at the beginning of the deal. There was talk (and an article) that claimed that this was due to two reasons. First, the FTC could be seeking a 2nd round of information. That pushes the fed approval process out another 30 days although someone who used to work in the FTC pointed at that many times the approval process is actually longer than 30 days if a 2nd round of info is needed. The guy who used to work with the FTC pointed out that with JDSU's past spat of purchases that it would be more complex for the fed's to analyze this deal and the real concern would most likely be in the thin film area as the combination of ETEK and JDSU would give JDSU almost a 90% control of this portion of the fiber optic market. That all said.. the guy bought ETEK himself. He feels that, while there are risks, the greatest likelihood is that the deal will go through and that 'worst case' the FTC may have them spin off the thin film portion of ETEK's business. Actually not 'worst case' as the deal could be called off and ETEK would have to find it's own valuation much like SDLI - that doesn't sound too bad in the LT though.. ST it would hurt. The second reason for the spread getting worse is that an arbitrage company dropped out last week. That left a gap that took awhile to make up. I guess this arb had been stung pretty bad in another recent deal and with ETEK/JDSU not getting a quick approval they bailed. On another note - IR departments for both companies have stated that if the fed DOES ask for a second round of info they will report this to investors which they have not yet done. All that aside I am sticking in it for the long haul. My tax situation is such that I can't afford booking more gains right now. In addition I feel ETEK would be a good investment even if it didn't merge with JDSU (they are #2 in the fiber optic market and SDLI is #3). Yes it would hurt in the ST. Finally, if you've noticed the spread has tightened up again although it's not back up to the levels it was at a week or so ago. Sorry for such a long post. Especially my first time on the thread (I don't do options yet.. still watching and learning) but this was a subject I've been following and pretty important to JDSU/ETEK investors.