Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

Financially, the deal is more or less OK, but they are going to take a bunch of goodwill on the book, and what I fear is an environment where companies having excessive goodwill on the books is penalized (Veco will probably end up with negative "clean" book value). Don't forget, a bunch of new shares are going to be issued, from the current 30 MM shares or so to close to 75 MM shares, and while sales will almost double, there will be more than double the shares. If you assume that a PS of 3 will be justified some time in the next few months on VECO, then yes, $30 could be reached, but you'd better be fast, because I don't think it will stay there for long. I have a target of $22/$24 only, and I'll be happy to take it out there. Mind you, at a valuation of 1 times sales, VECO could easily drop to $10.

Zeev