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Technology Stocks : Euroweb International - NASDAQ: EWEB
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To: Steve Gardality who wrote (548)2/21/2000 12:58:00 AM
From: chalu2  Read Replies (1) of 566
 
I think you would make more money on the long side. KPN's strategy is obviously to use EWEB as a vehicle through which it will build its East European investments; it already has a pretty good toehold in Hungary. It is my impression that Mr. Pieter Martens will guide the effort, and he is highly regarded within KPN for his investment and operational savvy. KPN is a growing $50 billion company. Euroweb has started showing up in KPN press announcements, which KPN would refrain from doing if it didn't want to put EWEB in the spotlight. My impression is that KPN is following the CMGI and Softbank model of acquiring a small company and then stuffing it full of valuable assets, some of which will likely be incubated for later spinoff offerings.

In this regard, this EWEB acquisition very much resembles Softbank's recent acquisition of the struggling Hong Kong apparel firm Cheung Wah (there is a Cheung Wah thread on SI so you can verify everything I am saying). Chenhg Wah on its own was going out of business; as a Softbank vehicle its price has zoomed up, and nothing has even happened there yet.

But it will, because otherwise the transaction would have no purpose, and big multinationals like KPN, CMGI and Softbank always have a purpose and a definite goal behind their acquisitions. I would actually be startled if KPN doesn't have a 5 year plan for the growth of EWEB. That would be expected of such a large company. It's S.O.P.

As with Cheung Wah, nothing has happened yet, but it will, it will.
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