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Technology Stocks : Softbank Group Corp

SFTBY 70.44

-3.2%

3:58 PM EST

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To: TobagoJack who wrote (3178)	1/10/2000 7:07:00 PM
From: manohar kanuri	Read Replies (1) of 6018

I think you'll have ample time to rebuild your MSFT from now till March. The pressure to come up with a response will probably cap the upside and the potential will provide the floor. Other things, as always, being equal. Let me throw this out at you: AOL/TW shares out: 4.165bln (1:1 + 1:1.5) Net for '00: 2.18bln (Harmon's annualization of last quarter) EPS: 52 cents My take is regulators will probably go the telco route and say everybody carries everybody, so who owns the physical cable becomes irrelevant. The part I'm having trouble with is extrapolating growth numbers keeping in mind that giant media library flowing across all kinds of pipes across all continents. Leverages the library (not the short-shelf life CNN or print media) beyond the physical cable footprint of TW. Assuming that today's AOL close is the operative number and TWX close absorbed all of the deal risk discount (a hefty 20%): $72 implies a multiple of 138 on prospective 12 months. Projecting Yahoo's 14 cents forward at 55% growth year on year, you have ~85 cents and a multiple of 515. The thing I'm looking at is AOL now has vastly more content (factor of ???) to pump out. Question: what multiple for AOL/TW? EPS x 100 = $52 x 138 = 72 x 200 = 104 x 515 = 268 I'm thinking $90 to $104 is fair on the moderately bullish side. Pick holes, throw stones please. manohar EDIT: I'm assuming 18-24 months from now you can order and view any AOLTW movie (and music and such) from any major urban center around the globe (watching Softbank ticks across markets in one corner of the screen). That is, a one-time quantum jump in growth rates sometime then, and then resume normal growth curve. All a bit of tea leaves and chicken entrails, but nevertheless.....

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