To: Ed Frye who wrote (11 ) 8/6/1998 4:32:00 PM From: William L. Oppenheim Read Replies (1) | Respond to
Halving of a stock price around the time a merger is announced is distressing to me. As to whether the question of entry by others into this area is better discussed in some other area of SI, perhaps. But not all the folks on this thread are as sophisticated as Dave when it comes to such issues, and after a halving of the stock price it would seem like nothing ought to be out of bounds in seeking some plausible explanation. This stock has gone down faster than the market in general. Perhaps with the due dilligence that goes into these deals, other information is circulating. Otherwise the synergistic effects of any merger in terms of avoiding duplication of administrative and sales services, and a mutual opening of each other's markets should indeed to lead to more value, not less. But that is not the market perception. HYSW is a well known and followed stock. I don't think it is a matter of people not being aware of syngery, so I am searching for other explanations. I sold after a 30% loss, but I do not rule out the idea of rentry in several months after the effects of the merger are better characterized. Is this in and out market timing--perhaps, but it was more about my impression of the general market and the decision to raise some cash and balance some of my winners at the same time. I've been investing for thirty years, and over that time have rarely moved back into a stock that I have sold. So this would be an exception only if I can see some true reversal in the trend, and the numbers begin to bear out the syngeristic potential. In a market like this, with some stocks off more than 50% in a matter of months, it is possible that there may be even better deals down the road, but I'll need some cash flexibility to take advantage of them. HYSW was sitting there and served my internal portifolio needs at this time as a sell. Nothing personal taken. And Ed, obviously most of this was directed more to Dave.
