CNGR, here's the news;
Thursday June 11, 8:00 am Eastern Time
Company Press Release
Post-IPO Trading Values Crown Group's Holding of Inktomi Corp. at $8
Million
DALLAS--(BUSINSS WIRE)--June 11, 1998--Crown Group, Inc. (Nasdaq:CNGR - news) today announced that the
market value of its investment holding in Inktomi Corp. (Nasdaq:INKT - news) approximated $8 million at the end of Inktomi's
first day of trading.
Inktomi Corp., headquartered in San Mateo, California, designs and manufactures software designed to ease congestion on the
Internet. In February 1998, The Crown Group purchased 222,222 shares (adjusted for a 2-for-3 reverse split) of Inktomi
Corp. common stock as an investment at a price of $4.50 per share when Inktomi was a private company. Inktomi went public
yesterday at an initial offering price of $18.00 per share, in an underwriting managed by Goldman Sachs & Co., BT Alex.
Brown, and Hambrecht & Quist. The price of Inktomi shares traded as high as $38.63 on Wednesday and closed the day at a
price of $36.00.
Based upon yesterday's closing price, The Crown Group's 222,222 Inktomi shares were valued at approximately $8 million,
compared with the Company's cost basis of $1 million. The Company's unrealized gain on its investment in Inktomi Corp.
approximated $7 million at the end of the stock market session on June 10, 1998.
Under GAAP accounting rules, The Crown Group's published income statements will not recognize any profit or loss from its
investment in Inktomi shares until all or part of the investment is sold. However, the Company's balance sheet will reflect the
market value of the shares at the end of each quarter, until all of the Inktomi shares owned by the Company are sold. Due to the
existence of a lock-up agreement between The Crown Group and the underwriters, these securities cannot be sold until six
months after the initial public offering date.
''While most of The Crown Group's assets are comprised of majority equity positions in small-cap companies with strong
growth potential, we are very pleased with the performance of our Inktomi investment after yesterday's initial public offering,''
commented Edward R. McMurphy, President and Chief Executive Officer of The Crown Group. ''Our primary goal is to build
value for our shareholders, and we continue to be alert to opportunities which are consistent with this objective.''
Crown Group, Inc. (''Crown''), which operates as The Crown Group, is a diversified company which seeks to enhance
shareholder value through the acquisition, development, and operation of small-cap companies with significant growth potential.
Such companies can benefit from Crown's financial and management expertise. The achievement of Crown's investment
objectives may involve initial public offerings, mergers, spinoff transactions or sales to strategic partners. The Company's
common stock is traded on Nasdaq under the symbol ''CNGR''.
This press release includes statements that may constitute ''forward-looking'' statements, usually containing the words
''believe'', ''estimate'', ''project'', ''expect'' or similar expressions. These statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or
contribute to such differences include, but are not limited to, changing economic conditions, interest rate trends, continued
acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon third-party
vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By
making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or
changes after the date of this release.
Contact:
Crown Group, Inc., Irving
Edward R. McMurphy, 972/717-3423
or
R.J. Falkner and Company
R. Jerry Falkner, CFA, 800/377-9893 |
