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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Gus who wrote (1583)	3/31/2000 2:11:00 PM
From: Sam	Read Replies (1) \| Respond to of 1989

Gus, <<Even if you do some fancy mental gymnastics and accept the basic conversion formula, how does one sweeten this kind of deal for the institutions who control 77% of SEG's outstanding shares WITHOUT decreasing the quality of SEG's capitalization and source of funds supporting its improving operations?>> Well, you do what previous LBO's have always done: you take on more debt. This particular LBO is amazing because they hardly have to take on any debt at all, since the value of the deal for them is camoflaged by VRTS's valuation. If they actually pull it off, the very brazenness of the deal will make them the toast of the LBO set. It is all a little ironic for me. When we were all toying with what to do with the embarrassing riches that VRTS had blossomed into, one of the suggestions that I made was to use VRTS stock to buy, e.g., Maxtor. I wondered out loud before if Maxtor holders would take a swap of low valuation stock for high valuation stock. I even thought then that they might be able to get Maxtor for $2-2.5 billion. Well, what they've in effect done was to use VRTS stock to buy....themselves. And for LESS than the 2-2.5 billion that I thought Maxtor might have been worth! Sick joke all.