AOL/TWX and the world changes # 49: -
This is the biggest and most earthshaking merger that i have ever seen. It is a bold move on the part of AOL and TWX's acceptance of it gives credence to the power of the internet for the future. The internet is for real and has been blessed by one of the biggest media companies. TWX decided to go with AOL because they knew they needed to build an internet strategy. It would have been late, and costly. So why not combine with the biggest and the best (OK, AOL and YHOO are neck and neck).
One of the reasons the market took off today, particularly the nets, was that was the real coming out for the internet industry. It is not a short term phenomena.
What lies ahead? First, it will be a lengthy merger process. There may or may not be a competing bid for either AOL or TWX. Both technically are in play, though they are calling it a merger of equals, which legally makes it questionable if they really are for sale. There are only a handful of companies that could step in at this point: T, MSFT, GE. Possible SBC or BEL, but unlikely. Don't think DIS or VO have the size or inclination.
AOL price may well suffer some more in the short run. It is giving up its internet valuation as it become more of a regular media company. But what a company. TWX and CBS/VIA , NWS and DIS are the great media US companies. VO and USAI are also runs. CBS/VIA, NWS and DIS all have networks. NWS and CBS/VIA are family controlled business, so that put them out of contention, in my opinion.
The AOL/TWX will have movies (Warner Bros), music (Warner records) news (CNN), cable properties, high speed access (roadrunner), books, and the biggest internet ISP with 20 million registered users.
A smart INVESTOR would buy a stake in this new venture, put it away for a few years, dust it off occassionally to admire it, and MAKE A TON OF MONEY ON IT. Trading wise, i think will be frustrating. jmho. Larry |
