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

To: Tai Jin who wrote (2364)	5/16/2000 9:40:00 PM
From: bambs	Respond to of 2439

That is the risk...I would expect that TRRA will hold up as TEF will make sure the deal is done. Their deep pockets will keep TRRA up. I still say it's a great long term short if you have the time. This deal was beautifully executed to this point...I wonder if the negotiations went something like this. The parties met... They agreed that TRRA was even more over valued then LYCOS... LYCOS $50 ish on monday. TRRA was $54 ish on monday. They agreed that since TRRA was so over valued that LCOS shareholders should get about 1.72 TRRA shares for each LCOS share. That would value TRRA at $29. They didn't want to tank TRRA. After a little thought about how stupid the general public is they agreed to release the news that TRRA was going to by LCOS soon. They figured correctly that traders would come in an buy up LYCOS thus making it almost as over valued as TRRA. After getting LYCOS half way to $97 they figured that enough air was pumped into it so they announced the deal. Think about it why else would they release the news on monday...why else would they want LCOS to run up 50%....it's because they agreed how over valued TRRA is...so they had to pump LCOS up or watch TRRA tank!!! The key is that with the deal they are trying to avoid the arb opportunity by having LYCOS stock valued at the fixed price of $97 and conditional on TRRA saying over $43. Beautiful trick really...will it work though? If TRRA goes below $43 the deal is off? So Lycos tanks back to $50 and TRRA goes back to $53....puts traders in a real pickle...one thing for sure...TRRA should be a long term short at this level. Lock up period this month on TRRA. Trading at 9000 times subscribers...AOL trades at 3000 times. And now they are over paying for LYCOS by double. The hole deal is pure insanity... I wonder if the deal will go through? I bet it just might...I expect the public will be dumb enough to by up LYCOS and some big boys will hold up TRRA until it the deal closes. The end result may be the insulation of both stocks. I can't see how in a TRRA can staying over $43 with out major support from the deep pockets of TEF. The thing is...who would short TRRA below $43 and kill the deal? If the deal doesn't go through one could argue that TRRA stock should bounce back to $50! I guess that's the logic that they are betting on. So, they figure that they shouldn't have too hard a time to hold up TRRA. The short is really only good if the deal goes through. Very tricky... TEF only has to buy up the stock that TRRA holders are selling. They will use their deep pockets and will pump this story in the media so I bet they pull it off. I look for TRRA to slide a few days after the deal closes...if it ever does. I give it 50/50 of actually going through. I agree LCOS holds 70-80 until just before the deal closes. If TRRA does slip below $43 look out LCOS longs! It will be very interesting to watch this one play out. Bambs

To: Tai Jin who wrote (2364)	5/16/2000 9:42:00 PM
From: Jim B	Respond to of 2439

with the billions of dollars TRRA and telefonica have set aside to buy stock in their own company... I doubt it will drop much at all... if they want this deal, they'll support the stock price.. LCOS executives might even reach into their pockets as well and buy some TRRA and LCOS stock to ensure the deal passes. I expect some analyst actions next week (upgrades or downgrades)... after hours shows LCOS closing at 75 1/4.. up nicely from 72 9/16 close in regular trading... we shall see what tomorrow brings ; should close up nicely (80+) with any strength in the NASD jim