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Technology Stocks : The Learning Company (TLC)

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To: Obewon who wrote (5315)8/15/1998 11:30:00 AM
From: Thomas C. Donald  Read Replies (1) of 6318
 
Obewon: Cendant apparently wants approximately $1.5 billion for its software division. During the first six months of 1998 its revenues were $226 million on which it lost $19 million. Adding a cost of capital of 6%/yr of $1.5 billion, the total losses for the six-month period would be $64 million. A buyer of Cendant Software would have to reduce its operating costs by 26% just to break even -- UNLESS it raised the prices of its products. Therefore, it seems highly likely that prices will be raised.

To make sure that the buyer will not lose market share, TLC will be pleased to help by matching the increases in product prices.
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