Ciba Gator

Wipro's Infocrossing Acquisition Could Herald A New Age of Buyouts

Agree with pratshar. You don't have to use jargon, but at least focus on the actual numbers instead of just telling stories. The "average investor" is quite intelligent and capable of handling facts and figures.

Anyway, if I understand your story correctly, you are suggesting that WIT will take the infrastructure assets and people they just acquired and redeploy them to do what--applications work?

Based on your story, are you saying that Company X with huge margins and growth rates should buy Company Y that has lower margins and growth because they can redeploy Company Y's assets such that Company Y delivers margins and growth in-line with Company X?? So Microsoft should buy Patni and all of a sudden Patni will become a cash machine because they are going to develop software in the Microsoft model?

Wipro's Infocrossing Acquisition Could Herald A New Age of Buyouts

I promised myself that I would stop responding to your posts, but I couldn't control myself....

Net income in 2006 was $8 million, you wrote. You didn't provide a free cash flow number, but let's assume that it is in-line with net income (growing companies usually have lower free cash flow than net income since they have to spend more to grow, but let's take the optimistic view here). If so, then a 20% annual return would yield:
9.6+11.5+13.8+16.6=$51... million of cumulative cash in the next four years, not $400 million.

If you are just multiplying 20% each year times the book value of the company, that makes no sense. A 20% "ROI" implies that Infocrossing will earn roughly $25 million in 2007 (20% of $127 million "net worth"). Take a look at the income statement or analyst estimates -- is IFOX going to earn $25 million this year (triple the 2006 level!!!)? Or next?

By the way, perhaps the companies you look at have 20% ROI, but most companies earn only a slight premium to their cost of capital, which is often much lower than 20%.

Which IT Outsourcing Company Gives Maximum Return on Covered Calls?

The next higher strike price for Satyam is $25 if the stock is at $24.50. Am I missing something?

Which IT Outsourcing Company Gives Maximum Return on Covered Calls?

Sorry, not sure why the original post was truncated. Here's another try:

Dan, dude, what the heck are you talking about?!?! You can't ignore time value of money "assuming" that one will hold a stock for the next six months and that capital losses in that time will be erased!!!! The central idea with options is that there IS a time value to ownership and capital. Jeez, man, quit it with the inane ramblings, you're just embarrassing yourself.

Of course Satyam looks great in your "analysis". You used a high strike price and ignored all the other variables!! Here's another look at your "analysis"--

Stock price on June-25 $24.50
Call premium for $25 for Jan-08 = $2.60
If one buys 200 shares one would invest $4,900
Max return is ($2.60 * 200) + (($25 - $24.50) * 200) = $620 = 12.7%
Min return is $2.60*200 = $520 = 10.6%

THE ACTUAL MIN RETURN IS:
-4,900 + ($2.60 * 200) = -$4,380 IF THE STOCK GOES TO $0.00

Dan, you can't IGNORE the value of the underlying stock. You can't ignore time value of money--of course if you pick a $30 strike price you will make "more money" at the "max". If you had run the analysis with a strike price of $50, you would have calculated an even greater "max" return.

This is beyond sloppy, it's just ignorant. Please try to understand what you are saying befor you say it.

Which IT Outsourcing Company Gives Maximum Return on Covered Calls?

Dan, dude, what the heck are you talking about?!?! You can't ignore time value of money "assuming" that one will hold a stock for the next six months and that capital losses in that time will be erased!!!! The central idea with options is that there IS a time value to ownership and capital. Jeez, man, quit it with the inane ramblings, you're just embarrassing yourself.

Of course Satyam looks great in your "analysis". You used a high strike price and ignored all the other variables!! Here's another look at your "analysis"--

Stock price on June-25 $24.50
Call premium for $25 for Jan-08 = $2.60

Increasing Taxes Should Keep India’s IT Biggies at Bay (INFY, WIT)

LOL, taking the battle to another forum, eh?!

No argument here. Your original article quoted an analyst who suggested that the tax rates would shoot up, but did not cite the timeframe. Since later in the article his growth commentary is based on quarter-to-quarter growth (I assume this--once again it is not mentioned in the article), one might believe that the tax rate is going to jump up this quarter as well.

As you rightfully point out, the tax rates do not change until fiscal 2010.

Yes I believe in FACTS and I do my homework. I simply found your original post to be misleading and I posted a question to obtain a public clarification. Well done!

Increasing Taxes Should Keep India’s IT Biggies at Bay (INFY, WIT)

WHY are tax rates going up????