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Technology Stocks : Qwest Communications (Q) (formerly QWST) -- Ignore unavailable to you. Want to Upgrade?

To: WTT2 who wrote (589)	1/15/1998 3:42:00 PM
From: Nick	Read Replies (1) \| Respond to of 6846

I can't believe QWST is down today.... Maybe this is the big dip I've been waiting for, meanwhile watching this thing rise $20! Nick

To: WTT2 who wrote (589)	1/15/1998 7:14:00 PM
From: nic	Read Replies (4) \| Respond to of 6846

WTT2, I've been slogging through the SEC filing... here's how QWST shares will be valued in the deal: QWST price QWST valuation PHX valuation under 47.5 price/2 + 23.75 price/(0.633price + 30.06) 47.5 - 52.5 52.5 0.015price 52.5 - 67.5 price 0.79 67.5 - 72.5 72.5 0.011price above 72.5 price/2 + 36.25 price/(0.633price + 45.89) where "price" is the usual average of QWST closing prices over a number of trading days. Since you get QWST shares in exchange for a (more or less) fixed sum of 28.5M, cheap valuation is better. With this deal PHX as a play on QWST is leveraged by a factor of 2 once you get outside the 47.5 - 72.5 price range. Note that you were incorrect in that there is a downside risk when you get below 52.5. Given the discount at which PHX trades, however, it looks like an attractive play: QWST would have to trade at $22 for PHX to be valued at the current $0.5 in the deal. Of course you assume the deal risk, and are speculating into the QWST future 3-4 months out via a very thinly traded stock... The up to $4M cash consideration (pending outcome of litigation) is not due until 3 years after the merger, with 7% interest accrued in the meantime. Thanks for sharing, - nic