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

To: Dave Chanoux who wrote (2097)	4/1/1999 12:36:00 PM
From: Duker	Read Replies (1) \| Respond to of 3813

I've never been a fan of Lam Research, probably because it doesn't fit my investment objectives. What are your objectives? Lam comes with lots of debt. The last report I saw (3/98, not a typo, a year ago) listed $340 Million in debt or about $9 per share. The debt has come in part from acquisitions. The debt was not merger related ... OnTrak was bought for .83 shares of Lam Common in August of 1997. The "lots of debt" is a $310mm 5% Conv. Sub Note '02 with a conversion price of $87.77 per share. I would liken this instrument to some of the cheapest equity you can get. Total LTD and Other stood at $337.5 on 12/31/98. On the other side of the B/S there was $362.9mm of C&E (including the restricted cash (accessable if needed) which is arose from a synthetic lease deal that they did ... which makes infinite sense for any technology company versus owning your own buildings ...). So, net debt is ($25.4mm) or Net Cash ... which does not seem outrageous to me ... and assumes that you pay cash versus force conversion by '02. I would look a little harder at the company before dismissing it out-of-hand ... There is an intuitive fit ... and NVLS/LRCX makes sense from an economic and strategic sense. --Duker

To: Dave Chanoux who wrote (2097)	4/1/1999 2:57:00 PM
From: Steve Fancy	Respond to of 3813

Hello Dave, These reports seem to suggest the possibility of NVLS taking out LAM in a stock swap for approx $40 a share? At a glance, looks like LAM's earnings have left much to be desired, but I haven't followed them and have no feel looking forward. I'm not understanding NVLS activity today based on this rumor...It would seem this deal may dampen enthusiasm over the short term. Wondering if NVLS is more up in sympathy with AMAT and their analyst meeting. As far as options, I've always been basically an options trader. Not a daytrader, but instead generally try and get out of calls in several days to weeks, and short puts with the intention to let then expire worthless. I generally only sell puts on stocks I don't mind owning if push comes to shove, and yes, having a great year so far...up about 30%. I hope the markets are treating you well also Dave. Currently I have an order in to sell my NVLS April 50 calls...I don't like holding options this deep in the money this close to expiration. Planning on getting into calls a little further out, but wondering if I should switch to AMAT shorter term on the basis that this rumor may slow NVLS down. Comments from anyone appreciated? ALA, yup, still hold it (hold stock on this one...long story). Just can't bear to get out this cheap. Company is just too big to drop much further IMO. Downside risk seems minimal, upside considerable. sf