Larry should not pay a penny more than PSFT's value. Larry has to think about his own shareholders too. As a ORCL shareholder, I would not go any further. Lets play the game in the market and lets see who wins. If PSFT can make it , more power to them. PSFT aquiring a dinosaur would not make it any better than what it is right now. There is no doubt that ORCL and SAP would make PSFT's life harder. PSFT management should come to their senses. Two together make sense! If ORCL walks away, PSFT will be heading for low teens. Any trouble to meet the numbers would bring the severe punishment. Good luck!
"There is no doubt that ORCL and SAP would make PSFT's life harder. PSFT management should come to their senses. Two together make sense! If ORCL walks away, PSFT will be heading for low teens."
This is the kind of statement which does not make the slightest bit of sense to me. Arguing whether or not a combined Oracle/Peoplesoft is a sensible and beneficial move from a strategy standpoint is one thing. However, claiming that Peoplesoft's stock price would decline if the BOD does not accept Oracle's offer is irrelevant. A company's long term strategy does not depend upon short term changes in their stock price.
"A company's long term strategy does not depend upon short term changes in their stock price. "
...think again...ask I2 if they don't think the stock price matters, or Ariba, or Seibel...
Low stock price drives down options, which makes holders less excited abour their own future in that company. Talent begins to leave and pretty soon all you have to show for is dead weight, poor service, no innovation.
Customers and prospects also track stock prices of their vendors, as a way to assess long term viability. If the trend is not your friend, the competition will point that out as a sign of weakness and raise FUD in the eyes of potential buyers.
The synergies between PSFT and JDEC are not that great, despite what Conway wants you to think. The notion that it's a good deal because it gives PSFT access to middle market is ludicrous -- most JDEC customers are AS400 folks who will have a hard time switching from that platform. Unless PSFT begins offering a solution for AS400, they'll be stuck with JDEC code forever, will have a hard time integrating the two organizations, and won't be able to realize any cost savings.
We are looking at both short and long term scenarios for PSFT. If ORCL walks away, PSFT will fall, whether you like or not. Its on the wall. Would it be any matter for long term scenario? We do not know. But one thing for sure is that PSFT has to produce good numbers in coming quarters. No excuses will be tolarated from this managment. Longs will be cursing management for sqandering the ORCL deal. If the management is that confident and can deliver the goods, I say BRAVO! Mark my word, pressure will be enormous!