The (Entire) market is pissed...In my mind....These guys can't fail.
CNBC interviewed a group of internet (specifically BB) analysts/money managers this morning and twice the audience asked about Excite@Home . When the question was asked, one of the guys looked like the caller had just defecated on his living room rug. Yes, E@H was a dominant player in BB... yes, they would play a part in the build out of BB, but he didn't know if it was a buy at this price. Another fellow acknowledged the comments of the first, added that T's new control over the company was favorable... then said he wouldn't buy it... questioned the risk involved and whether ATHM could maintain subscriber growth. Would he buy AOL... he lit up... absolutely !
Since ATHM has a decided lead in its BB footprint, one might conclude that these fellows are buying management... well Golly Gee !... management actually has fundamental value... what a surprise. They want to go to bed with Steve Case, but they don't even want to be in the same house with Jermoluk/Bell. Potential has no value, nor does book value... without management, potential is and always will be in question... risky... at the least, dead money.
Management is the elusive factor that negates growth in this case, subtracting from fundamental value in ever increasing multiples. The point of price equilibrium comes when growth overwhelms the negative impact of management perceptions, or when the management structure is overturned.
Mike
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