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To: Smartypts who wrote (668)	6/24/2000 11:45:00 AM
From: RockyBalboa	Read Replies (4) \| Respond to of 1766

No. You should not take metha's 85% stake from the 8,750, it is much bigger. And then your calculus includes a fatal error: >>>>>>>>>>>> 7,437,500 Div by Metha Shares out (35.57) = 223,125,000 (huh? How do you do it) 223,125,000 (<-whats this???) x estimated STLW price (lowball $30) = 66.93 <<<<<<<<<<<< Here is another calculation, based on actual filings etc. which is proven on around 12 spins. edgar-online.com STLW offers 8,750,000 shares or a share of just 13,93% of the post offering shares. Post offering shares: 62,779,807 of which METHA retains 86,07% or about 54.03 MM shares. If you like you can divide now the 54.03 by 35.57 (+ some dilutive options) to get the price "lever" which is roughly 1.5 (without discounting). Value the 54.03 MM shares by tthe offering price, $17 you get $918MM. Then add about 430MM for METHAs core business ($12/shr) and divide by 36MM metha shares. However, this amounts are valid before a spinn off and pre-IPO. After the spin however, expect a stiff discount in METHAs STLW holdings. I'd apply a formula for Metha: $12 + 1.5 x (STLW) price STLW: $17 $20 $25 $30 $40 $50 $70 $100 = METHA: $37.5 $47 $50 $57 $72 $87 $117 $162 without discount ----------------------------------------------------- w/discount 33% 29 32 37 42 52 62 ......... 50% 27 31 35 42 50 65 ... 66% 27 32 37 47 62 All linear calculations ....you see that STLW needs to trade at 40 and above to sustain todays METHA value. Also see morningstar: biz.yahoo.com Despite the positives, though, investors eyeing Stratos Lightwave shares are better off looking elsewhere. Namely, its parent company Methode Electronics (Nasdaq: METHA - news), which will retain 86% of Stratos shares. Assuming it prices at the middle of its range, Stratos will attain an initial market cap of $1.1 billion. Thus, of Methode's $1.4 billion market cap, roughly $940 million could be attributed to the spinoff. The other $460 million is the value of Methode's core electronics business, which translates into only 1.3 times sales and 17 times earnings. And if Stratos shares jump above its pricing range, Methode investors will get a hot IPO plus a dirt-cheap electronics business. Although Methode's electronics business has flat sales growth, it enjoys a solid balance sheet and profits. biz.yahoo.com