From today's WSJ Interactive:
"Analysts also raised the possibility that Microsoft
Corp.'s up-and-coming Microsoft Network on-line
service could easily acquire CompuServe, which uses
Microsoft technology, and blend their systems together
with relative ease."
"CompuServe declined to comment on any possibilities,
and its parent company refused to elaborate on the brief
statement issued Wednesday."
Calculating CompuServe's Value
"Still, any deal might go at prices well below
CompuServe's recent value. At its 52-week high, the
company had a value of $3.28 billion. Now the
company's market capitalization is at $1.17 billion.
Many industry observers blame H&R Block for waiting
too long to spin the company off -- missing the peak of
Wall Street's on-line ardor -- and permitting costly
missteps such as the stillborn WOW on-line service as
management turned over."
"The saddest story in this business has been the loss of
value for H&R Block shareholders," said Emily Green, a
director at Forrester Research Inc. "They realized late
that they had an asset with increasing value. Then they
realized late that they didn't have the management
expertise. Then they realized late they should've sold it."
"She contended AOL may fail to land CompuServe
because she believes "H&R wants to cash out, and I
don't think they would get cash from AOL." But others
say a stock deal could lessen the tax burden on H&R
Block, thereby improving the chances for AOL, which
has a market capitalization of $4.28 billion and is
expected to ring up $1.7 billion in revenue for its fiscal
year ending June 30."
"Kenneth Leon, senior analyst at ABN AMRO Chicago
Corp., has been bullish on CompuServe and values the
company at more than $2 billion, largely because of the
network-services division. He noted that the division
accounts for $260 million in annual revenue with annual
growth of 35%. Mr. Leon said the network-services
division and the cash on hand at CompuServe could
fetch a price of $22 a share, before adding in any extra
value for subscribers and on-line content."
Did you see the recent Fortune article re: firms managing their financials. Singled out as the egregious example - any guess? pathfinder.com@@VQafBwcAy6Eu3miN/fortune/1997/970331/ear.html
"Says Wharton School accounting professor Richard
Sloan, referring to both Boston Chicken and AOL: "They just view
accounting as another marketing tool that they should use to try and
promote their ideas."
Anyway, you made out with AOL and deserve kudos.
Regards
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