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Seagate LBO Dead: Here Are The Latecomer Fund Casualties
One of the most long-suffering LBO names, Seagate Tech, has just decided to pull the plug on its going private aspirations. After on October 14 months of LBO rumors culminated with a press release from STX that the firm had received a "preliminary indication of interest regarding a going private
transaction", today, just over a month later, the foreplay ended, and management is now forced to appease its angry shareholders by announcing a $2 billion share buyback having been snubbed by its PE suitor. Of course, this is too little, too late, and the stock is getting gutted in the after hours session. At last check the stock was just above $13, or a 6% slide from closing. Which begs the question: which hedge funds jumped late on the LBO bandwagon hoping to receive some of that 20% upside love? Well, quite a few it appears. The list below shows all the funds who bought for the first time by September 30, and possibly later. After all the LBO was not announced until October 14, and in this broken market it would be stupid to assume that this information was not leaked in advance. The question remains: who bought when, and who sold when. And how many of those who still have not sold, and played this name for the LBO are now stuck with far less valuable stock certificates?
Here are those who may have been smart to sell in advance of today's press release: all the funds below held zero or nominal amounts of STX shares in the June 30 quarter and ramped up heading into October (i.e., position is of September 30):
- Coatue: 4.2 million
- SG Gestion: 3.1 million
- Lazard Asset Management: 2.4 million
- SAC Capital (oops): 2.3 million
- Schroder Investment Management: 1.4 million
- Janus Capital (oops): 1.2 million
- CastleRock Management: 1.1 million
- Freestone Capital: 1.1 million
- Tahithromos: 1.0 million
- Suttonbrook Capital: 1.0 million
- Met Investors Advisory: 1.0 million
- J. Goldman & Co: 0.8 million
- First Eagle Investment: 0.7 million
And so forth. Altogether there are about 20 million shares bought on what was most likely an LBO catalyst expectation, and that possibility is now over. No buyback, absent a full MBO, will placate the bulk of these investors, some of which already have redemption issues due to recent subpoenas into their trading practices. Which once again begs the question: who will defect first. A little over 1 million shares were dumped in the AH session. That leaves about 19 million shares orphaned without a catalyst. And a far bigger question for all comparable hard disk LBOs: has cloud computing killed the hard disk model? Will anyone besides servers soon be needing hard disks now that distributed computing is becoming the norm?
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As a rule k always sell on buyout rumors.
It's rare to get. 3par back and forth.
So buy STX by Fri. Beat that sucker down! "Cloud" computing stinks.
Long coffee in cans.
Cloud will bust spectacularly
Eric "Place" Holder will see to it. Keeping my SEC porn on transportable hard drives - all 10 of them.
A public service message: CRM is forecasting income of $.46-$.47 cents a share in income for FY2011 which ends in February. CRM closed today $143.81, translating to a P/E of 305. Marc Benioff, CEO of CRM, sells over $1,000,000 in stock every day of the year. Buyer beware.
Can we stop w/ the senationalist BS. A stock down 6 pct on a day like today is nothing... "gutted!!!" Seriously what do you trade US t bills w/ no volatility whatsoever?
No more "senationalist" then CNBS trying to pimp the tech industry a month ago in an effort to move the market higher. As for gutted, it really depends where you bought it... and TD isn't implying shares were bought at the close today.
Maybe STX can do a reverse merger?
who would be good?
goatse?
"distributed computing" - warms my heart to see that term used.
The cloud makes it simpler and more cost effective to deliver and maintain HDDs. Instead of shipping them in dozens to many locations, now they ship entire containers of them to few giant customers.
There's plenty of demand for HDDs and it's growing. Margins may suck, but the product is needed.
All this cloud computing group think cracks me up. People think CPU cycles and memory come from thin air!
At the end of the day, at the end of the network cable, there is a server somewhere full of chips and hard drives. Nothin' comes for free.
Cloud computing will grow and server disk demands will continue to grow, but at a slower pace. End-user disk will be replaced by flash as prices come down. You see this already in iGadgets.
As a former Data Recovery engineer, who has seen A LOT of HDDs and the "stuff" stored there-upon, Seagate makes the best, most reliable HDDs. They are all I buy, if possible. WD is second, I don't bother with the rest.
Cloud computing? Ok, sure.
Been doing the IT thing since the mid-nineties, it bounces back and forth between local, the network, then local again, then "the network is the computer" (looking at the Sun Microsystems mouse pad advert as I type), then back to local, now "cloud" (iNetwork 2.0)...
Works until some exploit knocks the "cloud" offline or grabs a ton of unauthorized data off the "cloud", then we'll be back to local...whatever it is that drives numbers to get people to invest in new, not so original technology and buy the latest VisualStudio 2069 with proprietary xaml and video encoding codecs that work with nothing else (we keep trying to re-make the internet in our preferred, proprietary image, and the Azure is platform included free of charge...!), or Oracle Java 13.6.9 with Uber-Expresso Uber-Enterprise Beans (decaf or caf, flavors such as "vanilla dream" or "chocolate jalapeno truffle" downloadable for free for your Indian developers only) that work with our DB platform consistently (as long as you define consistancy as greater than 60%, we have to keep the 3rd world fulfilling their $6/hour social role and their Google "scape and paste" "code generator" kung-fu, after all) and now with built-in Amazon Cloud compatability, or whatever new/old idea can be dug up from the compost pile to drive per user/per processor software sales.
Wish I had a zillion $, I would buy Seagate and their technologies and take it fully private and continue to do the right thing...make the best HDDs and drive storage into the future (quantum storage, 3-D crystal storage, etc).
You are ALWAYS going to want/need local to do real time work, then backup/distribute to the network/cloud.
Either way, HDDs aren't going away soon (please see Counselor Troy if issues with the Next Generation future not coming true as soon as you want).
Jeez I am jaded tonight...
</rant and /sarcasm off>
screw cloud tech. I'm old school; HDD, SSD, HHD 4 lyfe. Western [Digital] SIIIIDDDE.