Papa, remember when we said this sector needed to go "internet" in order to move up? Well, the following says it all:
(BTW - I'm just sick!!! I started to buy 1000 sh this morning @10. After reading the co. history, I backed off. There goes $10,000!!!)
ZAP-
Monday July 6, 2:22 pm Eastern Time
Zapata to separate online unit from other business
(Updates with announcement)
HOUSTON, July 6 (Reuters) - Zapata Corp., a one-time oil driller trying to break into cyberspace, said on Monday its board decided to split into two companies with an eye toward becoming one of the world's leading Internet players.
Zapata also said in a statement it had agreed to buy or invest in 21 Web sites and electronic commerce businesses and put them under the Zap umbrella: zap.com.
The news triggered an upsurge in Zapata stock, which climbed $4.125 to $14 in midday composite trading on the New York Stock Exchange trading, where it was the biggest percentage gainer.
Other Internet stocks also rallied.
The Houston-based company, founded during the 1950s by former U.S. President George Bush, will split into Zapata Corp. (ZAP - news), a holding company with interests in marine protein and
food packaging, and Zap Corp., an Internet company.
The board also approve a stock buyback of up to five million shares, about 21 percent, of Zapata's 23.2 million outstanding shares of common stock.
Zapata -- which began in oil drilling but made waves in the Internet business with an unsuccessful offer in May for Internet search engine power Excite Inc. (XCIT - news) -- is looking at an initial
public offering, a spin-off and other options for Zap.
''Zap's goal is to become one of the largest Internet companies in the world,'' Chief Executive Avram Glazer said in a statement on Monday.
Zapata, which produces a gamut of products ranging from sausage casings to straws and fish oil, got into the online business two months ago.
The company estimates Zap.com will be one of the 10 largest Web sites in the world, based on the number of users, after the 21 transactions. That would be quite a challenge given the number of major players, including Internet navigation leader Yahoo! Inc. (YHOO - news), Microsoft Corp. (MSFT - news) and Walt Disney Co. (DIS - news) jostling for dominance in cyberspace.
Among the sites that Zap agreed to buy are the search engine Starting Point, a chat network called Chat Planet and a variety of electronic commerce sites, including book seller Bibliofind, music marketer Mass Music, and Virtual Techonology, which sells computer equipment.
The company took Wall Street by surprise in May by offering about $1.5 billion to buy Excite, a leading Internet search engine that is five times the size of Zapata. Excite rejected the offer because of a ''complete lack of synergy between the two companies' businesses.''
But Glazer said in an interview on Monday that Zapata was no longer as interested in making a large acquisition such as Excite.
''I don't see us at this point as doing another Excite-type offer,''he said. ''I don't think it's necessary.''
In April, Zapata announced a ''major strategic thrust'' to consolidate and acquire Internet and electronic commerce business.
Excite was among the Internet stocks that rallied Monday, gaining $5.19 to $104.125 on Nasdaq. Among other major Internet navigation companies, Yahoo! (YHOO - news) rose $14.125 to $187
and Lycos Inc. (LCOS - news) jumped $10.94 to $90 on Nasdaq. Internet software maker Netscape Communications Corp. (NSCP - news) rose $2.25 to $43.44, also on Nasdaq.
A company spokesman said Glazer saw the Internet as an investment opportunity.
Timothy Ramey, an analyst at Deutsche Bank Securities, said, ''I think they have direction. This is a guy who sees an opportunity to create value in the roll-up of Internet Web sites.''
Apart from Internet operations, Zapata has a 40 percent stake in Envirodyne Industries Inc. (EDYN - news), a food packaging and service supplier, and a 60 percent interest in Omega Protein Inc. (OME - news), which processes menhaden fish.
It sold off the last of its oil and gas reserves last year, the Zapata spokesman said.
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