Exciting time, page-237

Wow - I'd love to negotiate on a sale with you sometime, or offer you a job. I could lowball you and you'd accept the first offer with no negotiation! Sweeeeet!

The roadshows on at the moment are about putting the company on the radar with institutionals, not about getting them to buy in at this stage. They won't buy in until the work is complete and the announcement(s) are made later this month, all going to plan. This won't be their first rodeo, they know that even on good news, there will be plenty of profit to be made, even if the SP is 100, 200% higher than it is now. A positive announcement will remove a significant layer of uncertainty.

Say WD came along and offered 50 cents a share. The on-market traded price will leap to that figure for starters. Then the institutionals that have been at the roadshow will show their hands, plus any interested takeover competitors. If they think the offer is lowball, they will buy over and above that 50 cents a share. That's when we'll know what Mr Market truly values this at.

Say for example Samsung wanted in, if they felt the price was cheap, they might hook in knowing about the non-exclusive license deal WD has with 4DS. They might say, "who cares, we want this for phone memory, they want it for cloud computing/storage - the technology is tuneable and the two markets don't overlap, let's buy the tech for what we need it for and live with the licensing arrangement. Besides, the projected total market size is 70 Billion, we aren't going to have that all for ourselves."

So if you were wanting to exit on market after that first offer, its unlikely that you'd be selling to WD's broker. The board would also give their recommendation of whether to accept or not. They might state a target price. They aren't going to accept the first offer, nobody accepts the first offer. Whoever wins is going to have to knock it out of the park with a stellar offer that convinces rival bidders it isn't worthwhile living with WD having rights under license.