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After going private, Seagate Technology comes back

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A technology name familiar to some has disk drive maker Seagate Technology (NYSE:STX) $11.55 -3.75% pricing 72.5 million shares, of which 48.5 million shares ( are being offered by selling shareholders in an initial public offering (IPO) at $12, which was below the $13-$15 range initially planned.

Seagate traded under they symbol (SEG) before being taken private two years ago. At that time, it was one of the largest investment deals in high tech history. Silver Lake Partners led a group of private investors that paid about $1.9 billion for the company.

Under its IPO price of $12, today's offering represents a market capitalization of $5 billion. Insiders reportedly paid about $2 per share for the company. Current shareholders in Seagate are listed as Texas Pacific, August Capital, Goldman Sachs and J.P. Morgan Partners.

That's not a bad "high tech" investment and marks a 500% return on investment for some insiders, compared to a NASDAQ-100 Index (NDX.X) 1,038 +0.42%, which has declined roughly 59% during the same time period.

Both Goldman Sachs (NYSE:GS) $74.10 +0.13% and J.P. Morgan (NYSE:JPM) $24.00 -0.78% acted as co-lead managers in today's offering, with Morgan Stanley (MWD) $42.18 +1.61% and Salomon Smith Barney as lead underwriters.

That's not a bad "high tech" investment and marks a 500% return on investment for some insiders, compared to a NASDAQ-100 Index (NDX.X) 1,038 +0.42%, which has declined roughly 59% during the same time period.

The rather lukewarm reception and "discounted" IPO price of Seagate (STX) finds the Disk Drive Index (DDX.X) 74.40 +0.02% just now edging back into positive territory. Chief rival Western Digital (NYSE:WDC) $7.18 -2.84% trades lower in sympathy with STX's offering.

The major market indexes have turned a morning loss into marginal gains as the Dow Industrials (INDU) 8,586 talks on a 12-point gain to yesterday's 100-point rise. Technology stocks add to yesterday's rebound with the larger cap NASDAQ-100 Index (NDX.X) adding 8 points at 1,041, lead by sector gains in the CBOE Internet Index (INX.X) 97.89 +3.96% as it tries to reclaim the 100 level and the Fiber Optic Index (FOP.X) 51.40 +2.88% attempting to claw its way back to the still trending lower 200- day SMA of 54.00.

Jeff Bailey

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