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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: ForeverDell who wrote (125451)	5/17/1999 11:38:00 AM
From: arthur pritchard	Respond to of 176387

forever: money would flow into both ibm and dell, not out of ibm. the combination would be viewed as a killer---but is NOT happening. Naturally, if I see anything, will post immediately.

To: ForeverDell who wrote (125451)	5/17/1999 11:52:00 AM
From: Chuzzlewit	Read Replies (4) \| Respond to of 176387

Or would this type of merger[IBM/DELL] be so accretive to IBM, that institutions would pump more money into IBM. Mergers are rarely accretive when expressed on a per share basis, and those that are invariably imply decreased growth because the involve the acquisition of a slow growing company by a faster growing company. Many CEO's tout their mergers as immediately accretive based on total earnings, but that's no big deal -- whenever two profitable companies merge total earnings had better increase. You will generally find that merging companies will result in initially decreased eps because the acquiring company must pay more than the market price for the acquired company. The inescapable conclusion is that dilution is inevitable, and that's why the market price of acquiring companies almost always drops when it announces an acquisition. It is much more important to look for long-term advantages arising from mergers. The possibility of cross-selling, designing and building new technologies based on interlocking pieces, elimination of redundant facilities -- these are a few of those advantages.