Did you catch the Yahoo link to the Forbes article today?:
url: biz.yahoo.com
As far as I can tell, Forbes is implying that the AOL/TWX deal will make it so they (with roadrunner) can offer more to Cox/Comcast than ATHM can (I assume implying Cox and Comcast will switch to roadrunner). T, with a big investment in ATHM, had to scramble to save its investment and hence this deal. The article colors T as shaking in fear of AOL/TWX. The article almost leaves you with the feeling that Cox and Comcast will cash in their ATHM shares for a big profit in January and move to AOL/TWX.
Anyhow, this might have added a little worry to buyers today. I am sure everyone is thinking this deal over.
I don't like the way Forbes writes. Once they decide to paint black it gets into the writing. For example:
Armstrong today offered to buy out the stakes of two minority partners in @Home, namely cable providers Comcast (Nasdaq: CMCSK - news) and Cox Communications (NYSE: COX - news), for at least $48 a share. That's a 27% premium over the closing price of Excite@Home, on top of the nearly 10% boost the stock got from today's news.
The paragraph accidentally fails to mention that this is not until next year and they are not buying them out but simply offer a put to guarantee performance.
In the next paragraph they try to clear it up a little but wind up making you feel that Cox and Comcast can leave at any time starting now:
AT&T's buyout offer won't kick in until Jan. 1, 2001, at the earliest, which means Armstrong has guaranteed Cox and Comcast a healthy return on their investments if they remain part of the @Home venture for at least nine more months.
Then they get heavy with the black paint:
.....Armstrong is scrambling to respond to America Online's (NYSE: AOL - news) pending acquisition of cable and media giant Time Warner (NYSE: TWX - news), which has transformed the competitive landscape for broadband Internet service. That takeover will give AOL a way to deliver a wealth of content to its 20 million Internet subscribers at high speeds over Time Warner's cable system.
``They (AT&T) have their hands full,' says telecommunications analyst Jeffrey Kagan. ``Gone are the days when they only had to compete with MCI or Sprint,' he says, adding that the AOL-Time Warner combination poses the biggest threat to Armstrong's plans for broadband domination..... |
