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Technology Stocks : Digital Equipment Corp. (DEC) -- Ignore unavailable to you. Want to Upgrade?

To: Bruno Cipolla who wrote (2894)	2/4/1998 12:54:00 PM
From: George Dvorsky	Read Replies (1) \| Respond to of 3276

RE: "It should be 30$+0.945*33= 61.18$" It is, minus the uncertainty factor (the acquisition is not guaranteed and any balking could cause a free-fall in DEC) minus the fact that mostly arbitragers (I can't spell that one) are buying (CPQ gives greater return per $ invested so why buy DEC) and take a bit to catch up, plus the money CPQ might sweeten the deal with or another suitor might come up with, etc....... Some formula... gd

To: Bruno Cipolla who wrote (2894)	2/4/1998 1:30:00 PM
From: stock bull	Read Replies (1) \| Respond to of 3276

DEC will continue to trade a "little" below the $30+0.945cpq that you showed in your example. This seems to always be the case until the deal closes. Then you will get the full value of the deal; ie, $30+0.945cpq. I think the reason that DEC trades a "little" lower than the true value of the deal is that the Street wants to keep the delta between DEC's and CPQ's share price in the event something goes wrong and they want to bail out of DEC's stock. I'm sure that you've noticed how DEC now follows CPQ's stock. CPQ up, DEC up...CPQ down, DEC down. In effect, you now "own" CPQ shares. There's very little that DEC can do on their own that would move the stock's price, except, get a better offer on the table. Stock Bull