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Technology Stocks : America On-Line: will it survive ...?
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To: Bharat Kalra who wrote (10884)8/2/1998 9:00:00 PM
From: Todd Daniels   of 13594
 
Cable sub value per subscriber is merely shorthand for multiple
of cash flow.

The rumored AOL buyout price vs. the T/TCOMA buy was:

- 300% greater EBITDA multiple

- 400% greater price-to-book value

- Tangible assets only 23% those of TCI
(yet the rumored price is only 50% less)

- 0% of TCI's franchises asset; which
beyond balance sheet value is impossible
to replicate without buying TCI.

TCOMA/T AOL
Deal (at $100:Mid range of rumored
deal price)
Forward EBITDA MULTIPLE
(4x latest Q) 16 66
PRICE/BOOK 11 55
TANGIBLE ASSETS (net) $ 7.7b $1.8b
Property/Equip $ 6.5b $0.3b
FRANCHISE COST ASSETS (net) $14.0b --

Also: The $32 billion price reported by the
Financial Times is just 13% less than Worldcom
is paying for MCI.
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