Replies to post #42267 on Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

I bought BRCD yesterday. But you should realize that this acquisition is not cheap. I don't know Rhapsody, but from the release, all they are shipping now are few OEM systems, and the price tag seems quite high. The acquisition is made with stock, which is good and bad, it means dilution of 10%, but on the other hand, no hit on the cash side. Typically, after such a deal, there is an overhang of stock supply from those receiving the stock in the exchange, since it is only some 10% of the outstanding stock, it may have no negative impact. Look at what happened to VECO after their recent acquisition, not a pretty sight. But in this case, I think that the reaction may not be severe, since BRCD is already quite depressed relative to its peers. We will know soon enough.

Zeev

[Lane Hall-Witt]

akirsch--

One thing to keep in mind for BRCD today is that CSCO reports after the close and may make more comments on its entry into BRCD's market. BRCD has been suffering greatly from the perception that CSCO is going to disrupt BRCD's position in the marketplace. I'm not necessarily saying to dump the stock -- indeed, I'll be considering it, over the near term, for a buy myself because it has run so much less than its peers -- but I just think everyone should be aware of this looming CSCO risk, which could be magnified tonight with CSCO reporting.

Lane