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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: The Player who wrote (4247)	1/14/1999 10:06:00 PM
From: Rick	Read Replies (1) \| Respond to of 4509

Assuming the rumors about Manugistics takeover are true, and based on it's $4 move today it looks like a good bet, I have the following thoughts: - if SAP is the buyer, this would tend to give PSFT share price a boost, as savvy investors would assume that this would increase the pressure on PSFT to either deliver great results or do some kind of strengthening deal (partner with IBM). - if IBM is the buyer (i haven't heard this as a possibility, but just to cover the bases), this would tend to deflate PSFT share price, taking away any premium that remains on the IBM rumors. - if ORCL is the buyer, I don't have a strong opinion about the impact. I personally think a deal with IBM would be smart strategically, and make PSFT an even more credible and formidable long term threat to SAP. The hurdles that have been suggested by analysts are: 1) IBM has large SAP consulting practice that it would be reluctant to jeopardize. 2) IBM could not do a pooling-of-interests deal due to it's share buyback program. 3) Would PeopleSoft be a cultural fit, and is management open to this ? Does anybody have any thoughts on how high (or not) these hurdles are ? If you ask me, IBM should make a substantial investment in PeopleSoft, giving it options to buy more in the future, and giving PeopleSoft additional cash to fight the SAP battle. Alternatively, it should buy PSFT with Cash and Stock, avoiding EPS dilution, and sell the SAP practice. Thoughts, anyone ? Rick.