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

To: Kevin Linder who wrote (1624)	4/2/2000 11:46:00 AM
From: MikeM54321	Read Replies (2) \| Respond to of 1989

"....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." Kevin- My guess is your conversion factor isn't going to work quite that way. Don't you see a mass exodus of SEG, turned VRTS, shareholders selling on the day they get the opportunity? Personally, I know I am of that mind. I'm not interested in holding VRTS shares but am interested in holding SEG shares due to the apparent bottom the HDD industry is in. SEG is a value play. VRTS is an Internut play. SEG Management knows this. LBO players know this. If so, then this will keep a lot of downward pressure on the conversion ratio. In other words, even if VRTS ends up going to $200/share, SEG is not going to follow at $98. OR another way to put it, suddenly VRTS has a lot more to worry about and may not never reach the $200/share price analysts have previously forecasted. Six one way, half-dozen the other. Let me know if you think my reasoning is flawed. Thanks. -MikeM(From Florida)

To: Kevin Linder who wrote (1624)	4/2/2000 1:46:00 PM
From: Stu E.	Read Replies (2) \| Respond to of 1989

Kevin, thank you for your assessment. We all believe SEG's core DD business is a steal at $5 share. I am a longtime investor in EMC but can not buy it at its current astronomical multiple to earnings. I mention this because VRTS may have the same potential to experience super growth. If VRTS experiences a 50% plus earnings growth rate over the next 5 years, does that justify the current PE of greater than 200. Maybe it does, but I can't convince myself to buy VRTS at such a high multiple. Over the long run, I agree that VRTS is a good investment going forward. Paying the current high multiple with undervalued SEG shares, however, does not appear to be in the best interest of SEG shareholders. If the DD industry is turning up, SEG shareholders will be deprived of the benefits of the uptrend. The timing of the deal maximizes the value of VRTS while minimizing the value of SEG. I think SEG shareholders are not receiving fair value for their SEG shares. Stu