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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Sir Francis Drake who wrote (22252)	5/6/1999 9:43:00 AM
From: John F. Dowd	Respond to of 74651

SFD and ALL: Here are more of the details of the deal : Microsoft will pay $5 billion for newly issued AT&T convertible trust preferred securities and warrants. The preferred securities, which will have a face value of $5 billion and be priced at $50 per security, will make a quarterly payment of 62.5 cents per security. The preferred securities, which will be convertible into 66.7 million shares of AT&T common stock at a price of $75 per share, will have a maturity of 30 years, and the conversion feature can be terminated, under certain conditions, after three years. The warrants will be exercisable in three years to purchase 40 million AT&T common shares at a price of $75 per share. This appears to be a dividend of $250,000,000 per yr. (5% coupon) MSFT didn't give anything away! On the other hand the premium is pretty hefty. Gates is a great steward of our money! JFD