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Technology Stocks : BORL: Time to BUY! -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (7689)	11/23/1997 11:23:00 PM
From: David Miller	Read Replies (2) \| Respond to of 10836

the stock has to be worth more than 12 a share Right at the moment, with VSGN at 7.562, BORL is "worth" $8.47 via the VSGN acquisition path. I still find this a little odd, but I am not sure why... maybe there is a margin for the deal not actually happening? david

To: Linda Kaplan who wrote (7689)	11/23/1997 11:43:00 PM
From: i-node	Read Replies (1) \| Respond to of 10836

I haven't closely read the thread as it relates to what everyone thinks Borland's shares should be right now; I just happened to notice what I considered to be a totally irrational computation someone put forth. That said, it is simple enough to get a "starting point": Borland's value pre-announcement was fairly stable at 11-1/2, assuming the price of 12 was just a temporary blip. So, you could expect the market to react as follows: Borland 40M shares x 11.5 = 460,000,000 VSGN 14.5M shares x 5.25 = 76,125,000 --------------------- Total 536,125,000 Divide by post-announcement Borl shares outstanding / 52.5M --------------------- Estimated Borl Share Price 10.211 =========== Essentially, this is the price I'd expect the market to put on Borland's stock after the announcement. But it takes into account no synergies, and no intrinsic value for VSGN's underlying assets. This is critical, as VSGN was at a 52-week low -- in effect, the market was ignoring the intrinsic value of these assets at the time of the announcement, because they were not productive. Clearly, these same assets in Borland's hands should be much more valuable. What we now have is a combination of two companies, the stocks of which were underpriced to begin with. Both coming off 52-week lows; VSGN having seen a price of near 18 in the last year. In my view, 10.211 represents an absolute low. While the market may well cause it to dip below 10 (as it has already), I do not anticipate any sustained pricing at that level. I know I didn't exactly answer your question, but I hadn't weighed-in on this valuation issue and thought it would make a good chance to throw in my 2 cents. David