EarthLink Network ELNK Wraps Your Fish Message Board

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Technology Stocks : EarthLink Network ELNK Wraps Your Fish

ELNK 5.630

0.0%

Mar 8 4:00 PM EST

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To: Garry Betty who wrote (64)	5/9/1997 6:01:00 PM
From: Q.	of 220

Garry, can you explain how BBN's business model differs from yours? I know that BBN has 6X larger revenues, and it has an operating margin of (15%) vs. (51%) for ELNK. I'm wondering what other factors distinguish your company from theirs that I should take into account in putting a value on your stock. For the other thread participants, the reason I ask this question is that with a stock price of 12.88, the market is now valuing ELNK at 2.3 X revenue run rate based on most the recent Q's revenue. For comparison, the price GTE is paying to take over BBN corresponds to a valuation of BBN at 1.52 X revenue run rate, which makes ELNK appear to be priced significantly higher than its takeover value of 8.44, which I computed by ignoring any differences in the two companies business models. In both cases, BBN and ELNK, I have computed the enterprise value as the market cap based on diluted shares plus cash minus LT debt, and I computed the revenue run rate as 4 X most recent quarter.

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