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

To: Sam who wrote (1597)	3/31/2000 9:38:00 PM
From: Mark Madden	Read Replies (2) \| Respond to of 1989

Sam - Your pretty eloquent yourself. If the stockholders approve this deal, then it will appear the BOD and management did the correct action. However, I do not think there is a chance of stockholder approval. The managers of institutional accounts must be very skilled at valuations. I think they would see through this immediately. As you have seen us individual investors are at least 95% against the deal. IMHO the BOD and management will resign when find out the majority of stockholders feel ripped off. If they don't, another management team will surface and gain enough shareholder approval to force a vote for a new BOD. The new BOD will install new management that will gain shareholder confidence by increasing value. Am I letting my optimism get the best of me again? Regards, Mark

To: Sam who wrote (1597)	4/1/2000 3:08:00 AM
From: Z Analyzer	Read Replies (1) \| Respond to of 1989

<<They don't "deserve" it, any more than, for example, a military contractor deserves to get paid $1,000 for a wrench, even if they manage to "persuade" the government to pay it. >> Bad comparison. If a contractor gets the gov't to knowingly do so then the gov't is just stupid. *Management has a fidiciary obligation to shareholders which is the highest legal responsibility* to place the shareholder's interests ahead of their own.** Clearly, this has already been violated and it won't be corrected merely by sweetening the pot. Unfortunately, this type of situation is so rife with conflict of interest, it should probably be banned altogether.

To: Sam who wrote (1597)	4/2/2000 6:02:00 AM
From: Gus	Respond to of 1989

Sam, I underplayed the ethical and legal aspects of this deal in my post because I wanted to focus on what I think are the key endgame issues for the institutional investors who must approve this deal. I fully expect that the institutions will categorically reject this deal once they convince themselves of the true strenght of SEG's operations and earnings power that many not be so visible yet at this early stage of the industry's recovery especially when you consider that this BOD and this management team have 'unclean hands' and should not be relied upon on totally to provide useful information. Already you can see the outlines of a campaign that will overplay the nauseating cyclical multiples of this industry while underplaying the breakaway nature of this upswing for SEG, which to its credit invested heavily in R&D and manufacturing even as the industry was heading into a major downturn in 1997. When you consider the substantive legal obstacles in front of this deal (see Revlon Duties article below) then you can better understand my optimism and why I raised the point that the institutions who will reject this deal have a vested interest in a new BOD and management team who will deal more creatively with SEG's investment portfolio and manage the core operations better. Think about the demand for a stock like SEG, as presently structured, with a fresh BOD and management to manage several powerful product cycles (including single source status) while shaping an industry with expanding opportunities (NAS/SAN) but with a lousy rap as it comes out of the worst downturn it its history. One interesting thing about this industry as it continues to struggle with the overcapacity situation is the fact that the plummeting number of components has created a necessary and juncture point for the key head suppliers (RDRT, TDK, Alps) who aside from being unable to generate any kind of decent return on each head generation, must also now confront the prospects of continuing a ferocious density war on fewer and fewer platters requiring fewer and fewer recording heads. That trend clearly favors the best capitalized and surely that will produce a manner of competition that will, shall we say, be more favorable to the well capitalized vertically integrated players (IBM, SEG, Fujitsu), each of which will probably leap at the opportunity to outsource at least 20% of its head operations once the component makers erect truly formidable barriers to entry and even proactively reduce the number of players. Gus ....A change of control represents the last chance for shareholders to obtain a control premium for their shares. Revlon Duties greatly diminish the risk that directors, whose jobs are on the line, will engage in self-interested transactions at the expense of shareholders. Directors cannot simply approve a friendly merger based on their business judgment that a proposal delivers more value in the long term. A board that initiates a merger that it believes will provide the greatest long-term value to shareholders may trigger Revlon Duties.... ....Revlon Duties do not require getting top dollar through an auction of the company to the highest bidder. A board need only act reasonably to seek the transaction offering the best value reasonably available to the shareholders. Best value may be determined by using various methods other than an auction, including a canvass of the market or the gathering of detailed, reliable evidence to support the proposed price. So long as the approach is conducted even-handedly and without discrimination against any bidders, directors normally discharge their Revlon Duties.... .....Poor initial decision making may lead a corporation down the primrose path. Revlon Duties require that once the decision to transfer control of the company has been made, a board must act solely in the shareholders' best interest by seeking to maximize their wealth. The board may not observe the interests of nonshareholders if such consideration will adversely affect shareholders' wallets Shareholders vs.the world 'Revlon Duties' and state constituency statutes abanet.org