Preview

Seagate

Satisfactory Essays
Open Document
Open Document
517 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Seagate
Seagate Technology Buyout

1. We can examine the stock prices of Seagate and Veritas on Exhibits 3 and 5. Exhibit 3 shows us that Seagate had a stock price of 64.25$/share on March 10th 2000. Veritas stock price is disclosed on Exhibit 5 with 168.69$/share at that date, which is an increase in value of more than 200% within the last six months (Exchibit4). Moreover, we can assert that the pre-tax value of Veritas stake, which is held by Seagate, has notably exceeded Seagate’s market capitalization from November 1999 onwards. This is the result of selling Seagate’s Network & Storage Management Group (NSMG) to Veritas for 155 million shares of Veritas stock. Seagate became the largest stockholder of Veritas with an ownership over 40% through this transaction. Since, Seagate’s stock price is tied to Veritas’ stock price after the transaction, I would assume that Veritas is overvalued or Seagate is undervalued. To exploit that value gap, you could for instance short sell Veritas shares and wait till the value of the shares decrease. The value gap should become smaller, if every MBA student took this position.
2. There are many reasons why Seagate is priced low. The disk drive market is highly volatile and experienced declining revenues through fierce competition in the past. Despite Seagate’s market-leading position and its large size, the market was not valuing its disk drive business as expected. In contrast, Veritas is operating within another industry where significant growth was assumed. Although Veritas is a smaller company, the market evaluated its stock with a much higher price. Since the market value of a company is rather assessed by its potential future performance and growth than by its book value, Veritas is better priced than Seagate.
3. The low share price of Seagate in comparison to Veritas caused a bad mood among Seagate’s employees which resulted in worse work performance and hence affected the quality of the products. It was very difficult

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Over the past 30 years the cost of Electronics has steadily decreased. The cost of electronic storage has decreased greatly over the past 30 years as well. In this paper I will be talking about the decrease in the cost of RAM and Hard Drive Storage, how much will a 100TB HDD will cost when it becomes widely available in the future, and how much memory I will be able to buy with $100 in 10 years. In 1956, IBM created the first commercial Hard Drive called the IBM 305 RAMAC which held 5MB and cost a whopping 50 thousand dollars! Electronic storage started being more widespread during the early 1980’s, but it wasn’t until the 1990s that RAM and Hard Drive Storage begin to be cheap enough for the average person. Back in 1981 the price for one MB of Hard Drive storage space was $340! Most people couldn’t afford a computer back in the 1980’s because of the huge cost. Through the 1980’s the cost per MB fell from around $340 during 1981 then to $40 per MB in 1988, and finally to $9 per MB in 1990. The cost of one Bit of ram in 1981 was 0.000425 cents, in 1988 it was 0.000005 cents, in 1995 it was 0.000000158 cents, in 2000 the cost per Bit…

    • 494 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    The behavior described in the Headline on p. 131 is one in which numerous firms have entered the marketplace and driven the price of the product down. The graph below…

    • 961 Words
    • 4 Pages
    Powerful Essays
  • Powerful Essays

    Saga Holidays

    • 2927 Words
    • 12 Pages

    Although no one can prove that it is worth such a high price, this article endeavour to analyse its strategic market environment.…

    • 2927 Words
    • 12 Pages
    Powerful Essays
  • Better Essays

    This increase in rivalry within the industry has created an unstable market, and a threat by limiting the price an organization may charge. This enables organizations to drive out the competition by offering superior quality products at a lower price. As the retail book…

    • 1656 Words
    • 7 Pages
    Better Essays
  • Good Essays

    Radio Shack Stock Report

    • 1008 Words
    • 5 Pages

    Upon valuation, it is good to see that the price to earning multiple is lower than average, and that the price to sales multiple significantly lower than average for a medium to large size company. Unfortunately earnings growth in the past year has decelerated moderately compared to earning growth in the past three years.…

    • 1008 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    1. What is Veridian’s strategy for making money for its shareholders? Veridian is a defense information technology company that has always remained consistent in its focus of values-based leadership to create a long term strategy of meeting the needs of customers, employees, suppliers, as well as shareholders. Because of the broad intention and focus of the leadership, the corporate culture attracts the highest-skilled employees who are able to deliver outstanding technology and unrivaled services. This niche for professional defense service allows shareholders an opportunity to invest in a company that strives for consistent growth at a reasonable rate and price. 2. How should David Langstaff think about the proposed acquisition? David Langstaff must create a valuation system to determine the closest accurate estimate of the company’s current worth, and evaluate it within the offer from Quiescent. In this system, he must consider the long-term vision and growth ability of Veridian, in light of the values-based management which has become the core of the company. Will the acquisition further the ability of values-based leadership in the defense information industry, or will this be best achieved through Veridian remaining as is? Also, David must continue to consider not only the shareholders, but also all stakeholders, including employees as he evaluates the risks and opportunities of the acquisition. 3. What is the source of value of Veridian to Quiescent?…

    • 410 Words
    • 12 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Best Buy Swot Analysis

    • 358 Words
    • 2 Pages

    The following SWOT analysis is for Best Buy. Best Buy is an electronics and appliance retailing company that specializes in consumer electronics, home-office products, entertainment software, and household appliances. It is one of the largest specialty retailers in the United States, serving a diverse customer base. Best Buy’s current competitors include specialty home-office retailers (Staples, Office Depot); retail discounters (Wal-Mart); wholesale clubs (Costco, Sam’s Club); and online competitors (Amazon, Circuit City).…

    • 358 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    The Timken Company

    • 4910 Words
    • 20 Pages

    The case is best suited as a firm-valuation exercise in a first-year MBA finance course. It…

    • 4910 Words
    • 20 Pages
    Satisfactory Essays
  • Good Essays

    Army Professionalism

    • 489 Words
    • 2 Pages

    As leaders in the world's greatest Army, we are professionals. We are experts at our jobs and role models for our Soldiers. I expect you to conduct yourself in a professional manner at all times, on and off duty. You are responsible for the professional growth of Headquarters Platoon's Noncommissioned Officers (NCO). I expect you and the NCOs to treat Soldiers with respect, mentor them when they need help, and train them to become experts at their jobs. I will not tolerate derogatory language, unprofessional relationships, and excuses for poor judgment.…

    • 489 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Strategic Plan-Hertz

    • 7312 Words
    • 30 Pages

    In recent years, leaders of American organizations have faced a multitude of challenges. The numerous trends and events that have occurred in the past two decades have affected both American society and business practices. Think of the influences the following events and trends have had on our government, communities, and public agencies: an aging and diversifying population; changes in the nature of families; dramatic shifts in federal and state responsibilities and funding priorities; the emergence of the poor as the largest group of poor Americans; fears about terrorism; the emergence of obesity as an important health concern; and a recent crippling recession (Bryson, 2004). Now think how American society would suffer…

    • 7312 Words
    • 30 Pages
    Powerful Essays
  • Good Essays

    This paper explores the differences between two metropolitan areas from the Federal Bureau of Investigation’s Uniform Crime Reports of 2010-2012. You will read about the rates of crime for each area, which area had the most reported incidents, and did the rates change over time in either area. Also, this paper will explain what factors might explain the difference in the rates for these metropolitan areas and touch bases on what exactly is a Uniform Crime Report. Followed by my conclusion and future study along with references I used at the end.…

    • 835 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Markstrat Final Report

    • 2968 Words
    • 9 Pages

    Firm E performed very well during the 8 periods we were in control. During those periods we grew the company’s contribution margin from $14.2 million dollars up to $70 million dollars and oversaw a stock price increase of over 170%. During this period we managed a maximum of 5 brands. Three of these five brands are making substantial profits totaling $75.7 million in the 8th period. The other two brands were targeted at the emerging Vodite market and although they are not currently seeing a profit, projections show they are on track to see profits within the next 2 periods (Exhibit #: chart showing Vodite sales)…

    • 2968 Words
    • 9 Pages
    Good Essays
  • Best Essays

    The market which this company operates is has high unemployment statistics and low skill levels, it varies often and is a highly competitive market environment where efficiency, service quality and effectiveness are dominant to the companies continued viability. Failing standards of respect of service quality, declining employee performance, ineffective and inefficient working practices and procedures became evident to managers through closing in house monitoring.…

    • 2540 Words
    • 11 Pages
    Best Essays
  • Good Essays

    Dessault Case Analysis

    • 732 Words
    • 3 Pages

    * Not have software development based on customer problems have long term views on customer needs…

    • 732 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Short Term Cost

    • 1194 Words
    • 5 Pages

    that they sell.  There is too much competition from other firms, which sell homogeneous products.…

    • 1194 Words
    • 5 Pages
    Better Essays

Related Topics