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To: JAPG who wrote (43472)	6/14/2001 11:35:13 AM
From: straight life	Read Replies (2) \| Respond to of 54805

Haven't read the article but one thing quickly caught my eye: "Software maker Siebel Systems, for example, must pump up its unlevered free cash flow by 21% a year in perpetuity for its $49 share price to make sense. Not earnings or sales, mind you. Cold, hard cash. Ouch! Of course that was, oh, $8.35 ago, given SEBL's price of $40.65 as I write. Making SEBL's price much easier to defend, I suppose (sigh).

To: JAPG who wrote (43472)	6/14/2001 3:17:56 PM
From: Stu R	Read Replies (2) \| Respond to of 54805

<<Interesting article on the relevancy of cash flow valuations. Siebel valuated in the article: Forget About Earnings You want free cash flow--and lots of it. One finance expert explains why. fortune.com >> JAPG, I found the middle column "Value at 0% Cash Flow Growth" interesting. For example, it says Siebel has no value if it has no cash flow growth. The company has $3 a share book value and generated 130M of free cash flow last quarter. What would you pay for a company worth $3 book value plus millions of free cash flow with the downside being the amount of cash flow will not grow? The same column shows Microsoft worth $10 which is approximately its book value. In effect, they are saying that the approx. $13B of free cash flow it would generate each year with no growth has no value. Unless I'm missing something it makes it hard for me to accept the balance of their conclusions. Stu PS Based on the above it seems that they would probably pay you to take Gemstar off their hands ;-)