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To: Skeeter Bug who wrote (44719)	3/31/1999 8:15:00 PM
From: Thomas G. Busillo	Read Replies (1) \| Respond to of 53903

OT Skeeter, after reading Niles' SGI note, I wholeheartedly concur. The nature of his true analytical ability definitely was shining through in that note. On the morning before SGI warns, Niles is reiterating a buy based on an argument that SGI's 85% ownership of MIPS implies a valuation of <$0 for the SGI's main business. An excerpt (the boldface is his, as is also the silly little exclamation mark): We believe that the core computing business value of less than zero discounts all of the risks above. Though our revenue and EPS estimates may be slightly less than originally forecast for the quarter, momentum is still improving with regards to the turnaround. The current valuation of the company more than discounts this. On a valuation basis, the 85% SGI ownership in MIPS is worth $11.55 per share with net cash of $1.58 and value of Alias Wavefront of about $1.61. This implies a core computing business value of negative $0.49 per share! It is easy to reiterate our Buy. And then he proceeds to give an exhibit showing that numerically, what he is stating is true. What our "discoverer" of "hidden value" neglects to mention is that SUNW intends to divest itself of its MIPS holdings. MIPS Technologies Inc. and Silicon Graphics Inc. Announce Recapitalization Plan Transition Planned to Broaden Ownership of MIPS Technologies Inc. MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 14, 1999--MIPS Technologies Inc. (Nasdaq:MIPS - news) and Silicon Graphics Inc. (NYSE:SGI - news) announced today that MIPS Technologies Inc. will undertake a recapitalization of the company. The recapitalization plan creates a structure to manage an orderly multistep divestiture of Silicon Graphics' ownership of MIPS Technologies, with the divestiture expected to be complete by September 30, 2000. The reduction in Silicon Graphics' equity position in MIPS Technologies is expected to occur through secondary market sales and other transactions. Ultimately, the recapitalization is intended to preserve Silicon Graphics' ability to divest the remainder of its interest in MIPS Technologies in a tax-free transaction. A special committee of the independent directors of MIPS Technologies Inc., as well as the full board of directors approved the recapitalization plan. MIPS Technologies plans to file a proxy statement for a special stockholders meeting to seek the approval of its public stockholders. biz.yahoo.com In fact, the ball is already rolling: MIPS Technologies and Silicon Graphics Announce Offering of MIPS Common Stock MOUNTAIN VIEW, Calif., Feb. 26 /PRNewswire/ -- MIPS Technologies, Inc. (Nasdaq: MIPS - news) and Silicon Graphics, Inc. (NYSE: SGI - news) announced today that MIPS Technologies has filed a registration statement with the Securities and Exchange Commission for a proposed public offering by Silicon Graphics of 6,000,000 shares of MIPS Technologies common stock. The shares are being offered by Silicon Graphics as part of its previously announced intention to undertake a structured, multi-step divestiture of its interest in MIPS Technologies. Silicon Graphics has agreed to sell an additional 900,000 shares to cover any over-allotments. MIPS Technologies will not receive any proceeds from the offering. Any offering by Silicon Graphics of MIPS Technologies common stock will be subject to market and other conditions, including consummation of MIPS Technologies' previously announced recapitalization as described in its definitive proxy statement, also filed today with the Securities and Exchange Commission. The recapitalization is subject to the approval of MIPS Technologies public stockholders at a special meeting scheduled for March 31, 1999. The managing underwriters for the offering are Goldman, Sachs & Co., Credit Suisse First Boston Corporation and BancBoston Robertson Stephens Inc. biz.yahoo.com Nowhere in that note is the above mentioned. How can you not mention the above? MIPS has a float of 5.2 mil. shares and 37.3 shares outstanding. biz.yahoo.com So does the eventual liquidation of roughly 32.1 million shares on a float of 5.2 million (or putting it another way, increasing the float in excess of 600%) make his "argument" more valid or less valid? What does the reader of that note gain by the writer failing to mention SGI's intentions to divest itself of MIPS? Good trading, Tom