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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: Clarksterh who wrote (4042)	8/5/1998 11:02:00 AM
From: DanZ	Read Replies (1) \| Respond to of 6565

Clark, I'm afraid that I disagree with you on whether VLSI should have accepted the merger offer from LSI at $28 per share. There's no way to verify if it was true but too many things lined up the day the rumor surfaced and I tend to believe it. LSI was the only stock in the SOX that was down that day and VLSI was up a bunch. The rumor was on CNBC and they generally practice responsible journalism and don't blast every rumor that they hear. Now we come to find out that VLSI's legal council and President are gone. That tells me that the CEO and those two guys clashed on a deal. Why else would the legal council be gone? Stein was looking out for his own ass. Maybe LSI didn't offer him a position in the merged company? For the sake of this discussion, let's assume that an offer was on the table at 28. VLSI closed that day around 20 so LSI was willing to pay a 40% premium over the closing price. Granted, the stock had traded over 30 a few months ago, but that's past history and has nothing to do with what the stock was worth that day. The situation was: should shareholders accept 28 today or take the risk that the stock will be worth more sometime in the future. The time value of money comes into play here. I'd rather have a guaranteed 40% premium today than take the risk that the stock will either tank, underperform, or take whatever amount of time to reach 28. That's from an investor's point of view. Looking at it from a business point of view, the companies involved in the merger must have seen a good reason to do it. I'm not privy to, nor do I understand all the dealings of these two companies. And as an investor, I really don't care. If somebody is willing to pay me 40% more for my stock today than it was worth yesterday, then I'm going to sell it to them and put my money in another company. I really don't care what happens to the business after that. Why fall in love with a business? There are thousands of companies to invest in. So here's the deal. Stein screwed up a deal at 28 and now the stock is at 13 and under pressure. How long is it going to take for it to recover to 20, much less 28? If the rumor is true, then Stein screwed the shareholders and he needs to go. The only positive in this is that it shows that somebody was interested in VLSI at 28 and maybe another company will step up to the plate. This is not a reason to buy a stock though because you can see what happens when a greedy, look out for my self as*hole is running the company. Dan