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Technology Stocks : The Learning Company (TLC)
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To: Thomas C. Donald who wrote (6092)11/20/1998 9:35:00 AM
From: Trader Dave  Read Replies (1) of 6318
 
Quick thoughts:

1) Good news because it is a non-entity from a US consumer marketing perspective.

2) Cendant share loss likely to continue for some time as the company digests the acquisition.

3) Cendant development plans have been constrained to try to maximize profitability in the short term. Their product releases will be tragic in comparison to the 100 new titles TLC plans to launch in 1999.

4) It makes TLC the much stronger player from a joint venture and startegic partnership perspective. Any owners of major branded content that wants an interactive venue will likely seek out TLC now.

5) Valuation of 2 times trailing revenues looks fair enough for a second tier share losing and weakening competitor. (In addition, valuations for volatile games businesses are much lower.)

6) Since the buyer is likely to have much more of a profit motivation, it is likely that we will see "adult supervision" from a business perspective
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