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Technology Stocks : IFMX - Investment Discussion
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To: Guru Gus who wrote (14577)4/24/2001 11:33:18 PM
From: Dr. Zax  Read Replies (1) of 14631
 
What Value?

Hi folks,

I'm still trying to sort all of this out.

The good:
Long term this move is in the interest of IFMX shareholders. The DB business was a deadweight on the company. It was so large and cumbersome that it dragged down the growth from the other side of the business. In the end these two companies were going to split anyway, this deal just made it all happen sooner. IFMX is now the ticker symbol for today's IPO of Ascential Software
Ascential is a fast growing, lean, mean company with good products and 1.5 billion in cash at this point. It is a company I'd be very happy owning in the long term. It's main competitor will be Informatica. INFA is nearly out of cash and that will give them problems. Ascential has the kind of cash it takes to weather a very severe economic storm. It also has the cash to spend on a little more name recognition.

The Bad:

The street,and I, had valued the DB side business at more than $3.5/share. IFMX basically gave away the DB side of the business for 1.25 X sales, my feeling is they could have gotten more. That is the main reason the stock went down. I wouldn't rule out another offer from an IBM rival at this point, but I wouldn't give it a very high probability.
Ascential has yet to prove itself in the marketplace (although it is nearly a carbon copy of Ardent except for media360). Ascential could very well up their burn rate and blow a billion $$ in a couple quarters. If that happens we will be looking at pinksheets. I guess we'll just have to trust the Ascential management on this one.

Dr.Zax
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