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

To: Kevin Linder who wrote (1889)	7/14/2000 3:43:03 PM
From: Sam	Respond to of 1989

With Seagate trading at just under 64, and Veritas at just over 136, there is quite a discount opening up relative to the take-under terms. The terms of the takeunder say that the greater the value of the equities and cash that Veritas gets to keep (essentially everything over $800m), the more shares that Seagate stockholders get when and if the deal gets done. Seagate has over $2 billion in cash, plus another half billion or so (I haven't done the exact math, but I don't think that that is too far off). I'm not really sure how the ratio is computed, but I'm guessing that .5 isn't too far off (if anyone knows how to compute it exactly, please help out here). If this is true, then with VRTS trading at 136, SEG should be trading at $5 plus 68, or 73, not 64. As for the causes of the discount, well, aside from the time time value of money, there must be some skepticism as to whether the deal will get done or not. Perhaps due to this lawsuit that just cropped up yesterday, or perhaps because of disgruntled shareholders who believe that their best interest would be to hold on to their Seagate stock for a few years, until the hydromotors are powering all of the consumer appliances that Seagate sees coming in another 3 years. I posted a few notes on the CC on DD thread, FWIW. Far from complete notes. Perhaps I will get around to posting more on the CC tonight or over the weekend sometime. Sam