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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: Guy Gordon who wrote (2323)	7/23/2000 3:55:07 AM
From: pat mudge	Read Replies (1) \| Respond to of 3951

Doesn't that make SDLI awfully dangerous to hold right now? The stock is up on both the takeover premium and the S&P500 addition. If the deal were to all through for regulatory reasons the downside could be horrific. SDLI is not being added to the S&P500. They're both dangerous in terms of the downside once the S&P buying is over. There'll be a leveling off, to be sure. As for the DOJ, I believe documents were to be filed by July 15 and the DOJ has a certain number of days to respond. With ETEK it was close to 2 1/2 months when they asked for more documentation. Based on what was said during the merger CC, they're allowing for extended questioning and have therefore set the probable closing date for the end of December. LU's ME spinoff will make it more difficult for the DOJ to claim the combined company has a monopoly. Worst case JDSU will have to lighten up in certain product areas much like the Etek merger. I've read reports by H&Q, JP Morgan, CSFB, and Cowen and they all think the merger will pass. Either way, SDL is my long term choice. Pat

To: Guy Gordon who wrote (2323)	7/23/2000 11:01:53 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 3951

Doesn't that make SDLI awfully dangerous to hold right now? The stock is up on both the takeover premium and the S&P500 addition. If the deal were to all through for regulatory reasons the downside could be horrific. I am not too worried about the potential downside. SDLI has a takeover premium and JDSU has a market premium. Essentially the takeover premium is JDSU's way of aligning SDLI with JDSU's own market premium. It has become clearer with each passing day that JDSU deserves no market premium over SDLI. If the merger falls through, the narrowing of the JDSU/SDLI market premium gap should make up for the loss of takeover premium over an appreciable length of time (i.e., 3-6 months). Any short-term gap-down in SDLI could present a great buying opportunity. The S&P addition for JDSU is also a one-time, non-fundamental event which will skew things short-term, but should moot out over the long term.

To: Guy Gordon who wrote (2323)	7/24/2000 12:50:15 AM
From: djia101362	Read Replies (1) \| Respond to of 3951

Guy, you are absolutely correct. I think you'll find a more balanced response to the merger on the JDSU board. Nobody here is willing to admit SDLI has substantial downside risk if the merger were to fall through. There is probably a good chance that it will go through but until the deal is finalized, you just never know. I'm not the only one that feels this way but many think SDLI could drop over 100 pts on a failed merger; now with the S&P boost, that drop could get closer to 150 pts. The articial boost due to JDSU's S&P inclusion will only give JDSU price stability on a failed merger, SDLI would lose every single point attributable to JDSU's S&P run along w/ much of the merger premium. But again, that is a big if. If you think the merger is a done deal, then don't sweat it. I think the expansion of the merger discount over the past few days tells you that the S&P runnup adds risk to SDLI. I would not be surprised to see the discount expand the higher JDSU goes. An aggressive investor might consider swapping JDSU for SDLI if that happens. Disclosure: I own both JDSU and SDLI.