Vicki,
I see by your profile that you bought GVIL last week on the basis of the speculation of takeover. You should be able to search for news on your stocks in sites like Yahoo, if you don't have a paying service to send news to you. This is the article you wanted:
Analysts Discount Talk Apple Might Make Bid For Global Village
Dow Jones Online News, Friday, March 27, 1998 at 16:44
NEW YORK -(Dow Jones)- On-line rumors have Apple Computer Corp.
poised to make a bid for Global Village Communications Inc., a small
company that supplies modems to the computer maker, but analysts doubt a
deal is in the works.
Shares of Global Village, based in Sunnyvale, Calif., have climbed to
their highest level in months in response to the rumors, which have
spread on-line via bulletin board services and on Internet sites
dedicated to Apple matters, including one called Mac OS Rumors
(www.macosrumors.com).
Reflecting Global Village's recent troubles - it is unprofitable and
isn't expected to move out of the red this year or next - its shares
remain far below their all-time high of about $24, hit in late 1995. But
the rumors have lifted the stock above $2 for the first time since late
last year. Shares of Global Village (GVIL) finished trading Friday at
$2.28.
Analysts say this is the wrong time for Cupertino, Calif.-based Apple
to make an acquisition. And even if the company were willing to take on
the difficulties that come with a purchase, observers believe it isn't
likely to buy a maker of modems, which offer slim profit margins.
"It's hard to envision why Apple would want to buy them. It seems
like Apple has enough execution issues now," says Jeff Lipton, an
analyst at Hambrecht & Quist who follows Global Village. "[Apple is]
trying to engineer a turnaround; the last thing [they would] want to do
is deal with an integration and manage a different market," he says.
"Also, modems are a commodity, they're getting cheaper, so why bother
doing it?" Lipton has a "hold" investment rating on Global Village.
Andy Gore, editor in chief of Macworld, a San Francisco magazine,
says a deal for Global Village doesn't make sense at a time when Apple
is attempting to focus on its core operations. "Why would they buy a
modem business when they just unloaded the Newton business?" he says, in
reference to the hand-held computer business - once a major new
initiative at Apple - that the company recently shut down.
A Global Village official cautions against reading too much into
meetings between that company and Apple: "We're over there often. We're
strategic partners." Global Village provides Apple with the majority of
the modems used in Apple desktop systems, and some Global Village
managers are Apple alumni.
Analysts say the close relationship between the two companies doesn't
mean that Apple is looking for a deal. John T. Rossi, an analyst at
BancAmerica Robertson Stephens, says a takeover "seems to go against the
Apple initiative to slenderize operations. They've been focusing on
their core business and focusing on G3." G3 refers to Apple's highly
touted high-speed computers. "Strategically it could make sense, but it
would mark a departure for the phase of getting down to brass tacks."
Global Village's revenue rose 54% to $16.2 million in the last three
months of 1997, its fiscal third quarter, but the company posted a loss
of two cents a share, and its loss from continuing operations was wider,
at nine cents a share. The company has said that its return to
profitability depends in part on the success of new product
developments, and one piece of speculation suggests the company will
reinvent itself with a focus on telephone services. In reference to the
rumor, a spokesman says, "We are always looking at new technologies.
Communications is an area we are focusing on. But I don't know of
anything that will take us into another realm."
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved. |
