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

To: Satyr who wrote (24175)	4/10/1998 12:03:00 AM
From: RetiredNow	Read Replies (1) \| Respond to of 97611

Oh, thanks for the clarification, Satyr. That makes sense, because like you folks were saying, if the price is low on closing day, then goodwill is lower, and that means a higher PE. O.K. I've got it. Do you know when closing date is? Or are they waiting for antitrust clearance first?

To: Satyr who wrote (24175)	4/10/1998 12:40:00 AM
From: SDNA	Read Replies (2) \| Respond to of 97611

"The price of CPQ has nothing to do with the deal" How can you say that right after saying... "It calls for $30 and .945 shares of compaq for every share of DEC no matter what the price" The .945 part is what is affected by the price of CPQ stock on closing date, and that in turn affects the goodwill amount that may affect earnings depending on how it is treated..... In short, the price of CPQ stock does affect the value paid for DEC.. At the announcement date, the value of the deal was $9.5 Bil, right? At today's closing, the value of the deal is reflected by DEC's closing price times outstanding shares of about 147 mil shares, which is a bit over $7.5 bil. Even though that is a bit lower than the total of $30.00 cash plus .945 CPQ stock at today's price, the difference is what those arbitrage experts have been talking about in several occasions and different magazines... If the price of CPQ's stock did not affect the value of the deal, DEC's price would have been constant since the announcement...like in all cash deals.

To: Satyr who wrote (24175)	4/10/1998 2:47:00 PM
From: ed	Read Replies (2) \| Respond to of 97611

The price of CPQ has a lot to do with the deal. Say, at the closing date of the deal, CPQ stock price closed at $25, then the total cost of the deal is ($30 + $25 * 0.945) per share. If CPQ closed at $60, then moneywise, the total cost of the deal is ($30 + $60 * 0.945), Did you see the big difference in numbers ? As to the total number shares issued by CPQ, it is already factored in with the 2.5 : 1 , 2 : 1 stock split since middle of 1997. So, no further dilusion.