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

To: Trader Dave who wrote (526)	6/17/1998 7:44:00 PM
From: Sultan	Read Replies (2) \| Respond to of 777

Discreet tried a stupid move with MGI so may be Avid decided not to be left out. Bigger and even more insane, may be. This sucker has come down $15 from the high. Two competitors within the same sector make bone-headed moves within couple of months of each other and I have to own both. Techs may be recovering but sure does not feel like it.

To: Trader Dave who wrote (526)	6/18/1998 9:38:00 AM
From: Margureite deVille	Read Replies (2) \| Respond to of 777

TD: Please forgive my being so familiar in so addressing you, but I can't help myself - you are so fast with numbers. It took Auntie all night (all night??? - I need a social life)to duplicate your financial wizardry in analyzing this transaction. But I now think I see your numbers. Did I do this correctly? BEFORE AFTER COMMENT Operating Income 57.5 62.5 10% of $50MM revs Other Income 10.0 6.0 Take away $79MM cash Pre-tax Profit 67.5 68.5 Tax 21.0 21.0 31% tax rate After-tax Profit 46.5 47.5 EPS $2.00* $1.72 *Estimate per Zacks Shares Outstanding 23.3 27.5 MSFT shares + options Assumed P/E 20 20 Likely Share Price $40.00 $34.50 So dilution is $0.28 per share? I continue to believe that they will find a way to write off much, much more than 50% of the purchase price (which, by the way, I calculate at $209 million - the $79 million in options for the Softimage employees is not purchase price). BTW, I think that these options have to be expensed immediately as compensation expense because they are $.01 options. Moreover if the analysts are as friendly as they appear to be, I think that they will probably help investors see through non-cash charges, if any, in assessing earnings and earnings growth. And finally, I find it hard to believe that Mr. Miller and Co., after working so hard to bring this one back from the brink, are going to throw it all away. I have to believe that they have a sound reason for making this acquisition. I imagine that even you would concede them some credit for management decision-making in 1997-98. Shouldn't we give them some benefit of the doubt on this one? Or is that graveyard whistling, in fact, escaping from my lips? Marguerite P.S. Where did you get the financial info on Softimage - Avid IR would tell me nothing on that subject.