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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Hindupar Ramakrishna who wrote (9027)	3/30/1998 7:41:00 AM
From: steve goldman	Read Replies (3) \| Respond to of 11057

RE: Rumors. In my experience, noone usually ends up having a definative answer as to where rumors start or come from. They usually start from gossip and wishful thinking, sometimes on knowledge about activity relating to a company...ie.. a secretary tells her freind that xyz company has been visiting and inspecting the books of her firm, etc...she tells this person, they tell another, etc. Then it spreads, sometimes like a virus, to the point where it hits the floor, discussion groups, broker firms, brokers' desk, traders' desk, etc. Noone knows for sure, hence the word rumor. Noone will say "yes, it willhappen" or "no, it wont happen" because they don't want to to be wrong or have a legal problem. Nonetheless, rumors only makes stocks move if it has credibility amongst investors. In this stocks' case, I feel that IBM would be a great suitor for WDC. IBM hasnt been hit by margins, etc., they have plenty of cash, they are working hard at getting into hard drive business especially lower end and they could buy wdc's revenues (which they are themselves contributing to) for afraction of reveneus. Example: lets say dell was buying 2 billion in hard drives. Wouldn't they find it attractive if they could pick up WDC, with 5 billion in reveues (more than the 2 billion they consumer and enough to sell to to others), for the same 2 billion-ish they were paying for the drives and nothing more, especially in light of the cyclical nature of theindustry and the possibility they could have a very profitable component in the next few quarters? I do not recall how close to actual numbers my hypotheticals are, but you get my point. Nonetheless, I would never simply buy on rumors. MOst rumors do not prove fruitful, yet some do. For example, the banks over the past few qtrs., alexbrown, moneystore, etc. Usually, the stocks run onrumors, then sell back when rumors dissipate, THEN, ifyou believed and still see "action" in stock, is when I would consider, if at all, buyinga possible takeover candidate. Regards, Steve@yamner.com