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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: John F. Dowd who wrote (6474)	3/17/1998 9:58:00 AM
From: rtalley55	Read Replies (1) \| Respond to of 19080

Looking a little weak this morning. This pattern looks all to familiar. I'll bet we will not see 30 this week, but first thing Monday, 30+. Oh well.

To: John F. Dowd who wrote (6474)	3/17/1998 11:54:00 AM
From: rocks	Read Replies (1) \| Respond to of 19080

Well another take in this ML offering could be that they don't expect Oracle to be around by 2003 in which case all our money would be theirs for free till 2003. Seems a bit far fetched at this point.

To: John F. Dowd who wrote (6474)	3/17/1998 1:22:00 PM
From: lml	Read Replies (1) \| Respond to of 19080

Merrill is obviously a MM in ORCL stock. It likely holds a huge portion in its own account. Now, instead of placing various large positions in the hands of several of its largest institutional investors, it retains them in its own portfolio but with a special purpose corp, who then issues the derivative securities backed by the underlying common stock. IMHO, Merrill has done this because some of its clients didn't like the roller coaster ride they rode in December, & may not be convinced the ride is over. Merrill, on the other hand, is bullish on ORCL, but in service to its clientele will not push them to take on a level of risk (volatility) they wish to shy away from. So what do they do? They retain the risk (any downside), while still offering the client an opportunity to participate in ORCL's future appreciation, albeit, at a discounted level. Bottom line, is that Merrill is bullish on ORCL & expects to reap a nice return measured by the stocks appreciation at maturity less the return paid out to holders of the hybrid securities. Because Merrill is taking on downside risk here, which is viewed by the market right now to be somewhat significant, as demonstrated by price fluctuation over the past 6 months (take a look at the chart), one can expect Merrill's premium over an investor's expected return to be quite substantial. Merrill is not going to do this for peanuts. As the market views ORCL right now as pretty risky, it appears that Merrill is capitalizing on what it perceives as a divergence between historicial risk & return on ORCL stock. It expects ORCL to deliver close to its historical returns, or it wouldn't be doing the deal. JMO.

To: John F. Dowd who wrote (6474)	3/18/1998 2:38:00 AM
From: Sonki	Read Replies (1) \| Respond to of 19080

john, real quick: these are combo or Leaps and bonds. ML buys zero coupond bonds and orcl leaps (for.e.g. $5 bond that matures to 10) and rest of the money is spent on leaps. (this is my guess) this way they can gurantee your principal back. ML takes no risk. u take no risk ... the leaps expire worthless. IF someone can call ML and find out what do they use for benchmark on orcl? i.e. is it evey move orcl makes above 25 ? 30? etc. these are good in ira since u don't have to worry about gains in 0 coupon bonds. it's mainly for a scared bull. (often me).