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.

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

To: Stu E. who wrote (1616)	4/2/2000 10:10:00 AM
From: Kevin Linder	Read Replies (2) \| Respond to of 1989

Not really an institutional investor here Stu. This is more my money I am playing with. My personal opinion is that I do want more information about this deal. The drive business does seem to be getting a very low valuation -- not that low compared to what many LBO's seem to bring. The investment bankers funding the LBO are going to want 30-40% rates of return. The share exchange of SEG with VRTS shares is potentially more troubling. For the following reasons: 1) VRTS is a momentum play. 2) SEG was a value play 3) 128 million shares vs. 108 million shares I think a lot of institutions might want to get out of this deal all together because they are value players and there is no longer a "value" play. The momentum players are likely already owning VRTS shares. It seems to me that VRTS is going to be a good place to be going forward. The data storage market seems to be growing at a healthy clip and the addition to VRTS of the SNDSK; ZOOX and DRGN (or Lernout & H) shares present some interesting possibilities. VRTS will now be a player with solid assets and an ability to make acquisitions. L&H has been making some acquisitions and there may be a potential merger synergy there. A lot of this deal varies on the value of VRTS shares. Friday this thing got clocked big time --- most of the big brokerage firms are calling for VRTS to be at $200 by 12 months. That would change this deal to somewhere in the $98 per share range. I also believe that there is a remote possibility that this shareholder reaction could cause a 3rd party to come forward. My favorite would be IBM -- simply because they would probably love to get their hands on VRTS. Unfortunately, the Justice department seems to be cracking down on mergers that restrict the market. Initially a lot of deals take a drop. On top of this its the end of the quarter. I don't believe Luzco is doing this to "harm" the shareholders. He seems to have a better value system than that (please, this is just my own personal opinion). I think its early and we don't know all the facts yet. I am holding tight for the moment, but my finger is really white on the trigger finger. If I would end up owning VRTS shares that won't bother me too bad. Just my own itty bitty two cents... Kevin Linder