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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (3109)	4/28/1998 5:22:00 PM
From: Frodo Baxter	Read Replies (1) \| Respond to of 9256

>When if ever will we see some consolidation in Storage? Is WDC a target? Well, here's how the consolidation game seems to work: a) Your market share: x b) Your partner's market share: y c) Your market share after consolidation: x + y - z Most of the time, z = y. >Why is WDC always trading options at a premium, if there is not some underlying optomisim? Are you saying that WDC calls have a premium to the market, or a premium to puts? If the former, that's solely a function of WDC's (as well as the sector's) higher implied volatility. If the latter, that ought to be an arbitrage opportunity.

To: Mark Oliver who wrote (3109)	4/28/1998 7:21:00 PM
From: LK2	Respond to of 9256

Mark, you hit it exactly right. I don't have a clue what the drive stock prices are going to do, this coming week, or even this coming year. And I can't relate the price action of WDC, in any meaningful (usable) way, to takeover speculation, talk that industry conditions are getting better, whatever. Even if I read in tomorrow's newspaper that there was an offer to buy WDC at $27 or $30 a share, it wouldn't be that useful to me-because on a practical level, I wouldn't be able to buy any WDC shares after reading the news to profit from the proposed merger. The price of WDC would already have risen in response to the merger. The only way to profit (significantly) from this fictional merger news, would be to act on the news before it was public, and before it was reflected in the stock price. That kind of news just doesn't come my way. Regards, Larry