Cramer Reads the Tea Leaves at Seagate

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Who would have thought that

Imprimis

would one day be a Trojan horse at

Seagate

(SEG)

?

In a previous decade, when

Control Data

was bleeding from the eyeballs, Larry Perlman, perhaps the single most impressive turnaround artist alive today, sold Al Shugart on buying Control Data's high-end drive business.

It was a fabulous match. Seagate got its breakout from the commodity low-end business that had caused profits to ebb and flow with the regularity of the Atlantic, and Control Data got cash, stock and a note that kept it alive while Perlman turned it into a service company called

Ceridian

(CEN) - Get Report

. The Control Data reformation -- this company should have disappeared and gone bankrupt if it weren't for Perlman, who is not a showman, so we don't know and revere him as we should -- began the day Shugart bought CDA's storage business.

To this day I have never met anyone as impressive, forthright and tough as Perlman, the man who would not let Control Data die.

Now it turns out, according to the

Journal

, that Perlman helped boot Shugart and put in Steve Luczo. Wow. Where I come from this is big news. Shugart just dominated the conference call I was on last week. His thinking has dominated this company for as long as I can remember. Luczo was a deal man, a finance guy, not a drive guy.

Something must be afoot here bigger than is let on. Luczo built the new Seagate under Shugart's wing, a company that has more software assets than all of the other drive companies combined. Still, it was Shugart's show and for Perlman to get this involved as a director, there has to be either a: some huge changes coming, or b. some real incompetence that has been hidden from us. Could Perlman be now engineering some broader restructuring of Seagate that would bring out what everyone knows is massive value?

Either way, I was very worried about my Seagate position when this news came out. I had hoped to see more positives out of the conference call than I heard. After all,

IBM

(IBM) - Get Report

spoke glowingly about its hard drive division and seems to be making tons. Why didn't Seagate? (Yes I know the pricing environment is awful, but it is awful for IBM, too.)

Now that I know Perlman is behind the move, I know what I am going to spend my time doing today. Figuring out how much this company is worth. I did the same for Control Data a decade ago and I got a quadruple. It will be time well spent.

*****

Random musings:

Here's an idea. The collective clout of the

Society of Business Editors and Writers

is great. I remember a couple of decades ago when journalists banded together to find out who was responsible for the murdering of a fine Arizona journalist, Don Bowles. I don't want to confuse homicide with fraud, but perhaps this

Cendant

(CD)

issue should merit a joint SWAT team from the media led by SABEW. That would show the feds, including the ones who have started investigating this out of Newark, that the journalists know we have to stop the culture of lying to please the Street and getting away with it ... When I was I running the

Harvard Crimson

in 1976,

Steve Ballmer

was my right-hand man, driving the business side. If there could be a harder-working, more honest, more intelligent and tougher businessman out there, I don't know of him. Gratz Steve on the prexy job at Microsoft. I know we have had our differences in the past, but good luck to you!!! ... So did the

Carnival

(CCL) - Get Report

guys see the fire coming, is that what the

Journal

is implying in its insider selling article? Did they sell stock, set the fire and now intend to buy it back? I know this is the pot calling the kettle black, but how about a little sensitivity, please?

James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com.

At the time of publication his fund was long Cendant, IBM, Microsoft and Seagate, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to TheStreet.com at

letters@thestreet.com.