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`Absolutely A Waste Of Time For Investors'

Up Front: Paper Plays


So Viacom captures Paramount Communications. The hindsight question: When was the best day to cash out your Paramount stock? Answer: It was better to have sold on Nov. 12, when it hit its high of $83.50 rather than waiting to tender to Viacom in February. If you had reinvested the November payoff to match the Standard & Poor's 500-stock index, you would have $84.58 when the deal closed on Feb. 14 (chart). Even if you had sold out at $77.50 on Sept. 21, when QVC Network joined the fray, your investment on the same basis would be worth $80.25. That's just a bit less than what Viacom's complex cash-and-securities offer may prove to be worth. Growls PaineWebber analyst Chris Dixon, who values the offer at $82.88: "This has absolutely been a waste of time for investors."

See, there's no guarantee folks will end up with $82.88. That sum is partly based on what the stock should be fetching a year from now, when anything can happen. If you believe in efficient markets, consider an easier way to value Viacom's bid. Paramount closed at 76 1/8 on the Feb. 14 deal-day.EDITED BY LARRY LIGHT AND JULIE TILSNER

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