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# OCZ Technology Group Inc Message Board

## verify my math pls buyout at 17.00?

unless i am missing something they are saying 1.14 billion so that /shares outstanding = 17 dollars a share correct??

plus add in short squeeze and i have no idea what that would be.

so we are looking for at least 17?

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• I think so too. We finally got it.

• So I went ahead and did an algebraic model devoid of considerations except what's under discussion. But first, a cashless exercise still brings in the cash exercise price to Treasury. With that in mind, the model simplifies to:

Just add the cash derived from the exercise of the derivatives to the offer price and divide the total by the diluted sharecount and you get the offer price per share, p.

p = (1.14B + \$34.6M)/73.6M = \$15.96!

(I've corrected the sharecount I used previously)

So, \$1.14B translates to an offer price of \$16.00. Since the expectation is that there will be a stock component, then this price will vary to reflect the offeror's stock price changes.

• It equals a 1.75 cents for 1 dollars worth of revenue. It is a fair and equal value for a tech stock infact you would pay that if you bought Cisco today at face value.

It is a very good and fair deal at that price.

• What you are missing is the possibility that there will be no deal. If it was a sure thing, the stock would have gone a lot higher than \$8.00 in after hour trading.

• The exact price would depend on modeling assumptions we don't have access to but for our purposes the deal value is a good benchmark, and I agree in that case it would be an iterative calculation if done precisely.

It's rather theoretical though because it's really up to Seagate whether or not they want to keep the extra cash, or setup some kind of repurchase arrangement.

Also, some options may have explicit "cashless exercise" features already that allow holders the right to receive a net amount of shares without putting up any cash. That would also happen at the time of closing based on the final deal price when the options are extinguished.

Even though the deal valuation in all likelihood originated as an aggregate figure (eg, \$1.15 billion), by the time it gets inked in the definitive contract it will be represented as a per share amount, so by that point in time it becomes somewhat moot to shareholders how they got there mathematically.

• You're a little high. There should be some additional dilution due to options that have been awarded to management and employees. There could be a few million more shares in the O/S.

• Thanks.

Stocksock, you said that cash proceeds are used to buyback a like amount of stock. Curious to know at what price? Perhaps an iterative method is used to arrive at that price?

If I add back the proceeds from the exercise of options to the offer price, then I get \$16.16 but I don't know if this is the norm.

• Almost. You need to offset the dilutive shares with the cash proceeds that the company would collect as a result of option exercise. The way to do that is using something called the Treasury Method which assumes that cash proceeds are used to buyback a like amount of stock.

Thus I think you get to 72 million shares and \$16 per share consideration.

• ciao....

• As of June 30, 2012: 67.7M shares outstanding from OCZ website

Add 5,935,605 options, warrants and rights that become exercisable.

Total: 72.7M

Offer \$1.14B equivalent to:\$15.70/share.

Agreed?

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