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

To: Z Analyzer who wrote (5783)	11/28/1997 11:37:00 AM
From: Rob S.	Respond to of 9124

1)For those opposed to spinning off all of DLT, what is wrong with "rights" or shares equal to 10% of DLT trading publicly and 90% remaining owned by Quantum (incidentally if you receive one share of DLT rights for each ten shares of Quantum owned and don't sell your right, you still own exactly what you own now but will likely be a whole lot wealthier. And Quantum's more diversified status as a storage company remains intact. I would agree with something like a 10% "rights" offering. That does make sense because it would increase awareness of worth locked up in the company. It also makes sense because it would turn on the "Wall Street Money Machine" by getting a few major brokerages involved in actively promoting the stock issue (while they make millions).

To: Z Analyzer who wrote (5783)	11/28/1997 1:02:00 PM
From: set	Read Replies (1) \| Respond to of 9124

> For all those who feel... while it seems clear that DLT as a separate business would be getting a mammoth multiple, such a business [ticker (tape)?] would also be subject to all the volitility due a single product technology business. should quantum fail to build a stable long term business out of it, what happens to the issue? also, if the rights were to be issued, what would that say about the rest of the business, that they have no real faith in it? if that's the case why not just get rid of the DD biz altogether? maybe you can answer this question (I can't - it's a real question): if the tape business were standing alone, could it support its own R&D and infrastructure? if not then its multiple would have to come down accordingly. to what extent does the tape business depend on the size of the company, in terms of overall revs and capacity for investment? hense to what extent is the multiple the tape business can get supported by the lower multiple DD business? these questions have to effect how you blend the multiples, although I have no idea what the formula might be. is this a non-issue? Shahar

To: Z Analyzer who wrote (5783)	11/28/1997 1:24:00 PM
From: Gus	Read Replies (1) \| Respond to of 9124

Z, Perhaps, it's time to take management out of the loop and recruit some really annoying guys into the effort to unbundle the value of DLT/NFR/SSD from the commodity disk drive biz. Gus Relational Investors Acquires Stake in Storage Technology, Urges Buyback By William M. Bulkeley Staff Reporter of The Wall Street Journal October 20, 1997 Relational Investors Inc., an activist money manager, said it has become one of the top shareholders in Storage Technology Corp., and is agitating for a $1 billion stock buyback. Ralph Whitworth, a manager of Relational, said that if Storage Tech doesn't undertake the buyback soon, he expects to mount a proxy fight to replace one or two directors of the Louisville, Colo., maker of computer storage devices. Many analysts and investors have looked at Storage Tech's strong cash position-$601 million at the end of June and low debt of $21 million, and predicted the company would undertake an acquisition or a stock buyback. However, Relational says it wants to push Storage Tech management to decide on a buyback rather than a takeover, and to do it sooner rather than later. A spokesman for Storage Tech noted that the company had a $200 million buyback of shares last year and is buying 1.5 million shares this year as part of a program to cover employee stock options. Larger buybacks are "something we certainly consider," he added. In composite New York Stock Exchange trading Friday, Storage Tech closed at $51.50, down 87.5 cents. Mr. Whitworth declined to specify Relational's stake in Storage Tech, but said it was larger than the 1.3 million shares, or 2.1%, that American Century Investment Management Inc., the 10th-largest holder, owned on June 30; and smaller than the 2.6 million shares, or 4.2%, of J.& W. Seligman & Co., the largest holder. Relational, of San Diego, was formed in 1995 by Mr. Whitworth and David H. Batchelder to target companies where governance changes could improve performance. It has nearly $300 million under management, including $200 million from the California Public Employees'Retirement System, which has also been active in prodding Corporations. In the 1980s, Messrs. Whitworth and Batchelder worked for corporate raider T. Boone Pickens at Mesa Inc., the Texas energy company. More recently, Mr. Whitworth advised financier Kirk Kerkorian in his successful effort to have Chrysler Corp. undertake a big buyback. Relational recently disclosed in a filing that it had acquired 9.9% of Apria Healthcare Group Inc., and urged it to move quickly to boost value or face a proxy fight. Mr. Whitworth said that Storage Tech has $500 million in cash beyond what he considers necessary for operations, and is generating $25 million more a month, giving it ample flexibility for a big buyback. He added that despite improving results since David Weiss took over as chief executive officer two years ago, the company's stock price has lagged. As of Friday, Storage Tech stock had risen 10.7% since the beginning of the year, while the S&P 500 stock index was up 38% and the Dow Jones index of U.S. computer stocks had risen by 59%. Storage Tech has improved results through cost cutting in recent years, but sales growth has been slow. In the first half of this year, the company's net increased 28% to $93.6 million while sales rose 2.5% to $955.6 million. Mr. Whitworth reckons that a $1 billion buyback over 12 months would eliminate about 17 million of the company's 61 million shares outstanding, boost the share price to about $74, and remove from management the temptation of making a highpriced acquisition. Storage Tech would end up with $250 million in cash and debt of $250 million, with a market capitalization of $3.3 billion, compared with $3.1 billion today, according to Mr. Whitworth. "This is a very conservative amount of debt," he said. "We aren't trying to put them on the precipice."