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

To: RealMuLan who wrote (2367)	5/17/2000 12:24:00 AM
From: Rajiv	Read Replies (2) \| Respond to of 2439

Here is my understanding of the TRRA-LCOS deal - TRRA gets 97.55 of TRRA stock (adjusted by a 20% symmetrical collar). The deal is based on yesterday's closing price of TRRA - 56.875. If TRRA is around this level, each shareholder gets 1.715 shares of TRRA. The exchange ratio gets adjusted (to maintain the 97.55) as long as TRRA remains within 20% of yesterday's closing price. LCOS shareholders do not get 97.55 worth of TRRA stock if TRRA is below 45.5 TRRA's Price at time of closing Exchange ratio 68.25 (56 7/8 1.2) 1.433 ($97.55 of TRRA stock) 56.875 1.715 ($97.55 of TRRA stock) 45.5 (56 7/8 0.8) 2.15 ($97.55 of TRRA stock) 40 2.15 ($83 of TRRA stock) 35 2.15 ($75.25 of TRRA stock) 30 2.15 ($64.5 of TRRA stock) 75 1.433 ($107.5 of TRRA stock) 80 1.433 ($114.6 of TRRA stock) IMHO, there will be lot of downward pressure on TRRA's stock price over the next few weeks. In an average deal of this size, TRRA would have slipped below 45.5 within few hours. The illiquidity of TRRA stock might cause it to take longer. In deals of this size, the target is usually downgraded after the deal is announced. I am expecting LCOS to be downgraded. TRRA on the other hand might be pumped by a few analysts. Disclosure - I am short TRRA Regards, Rajiv