USAI, 61% stake in Ticketmaster Online-CitySearch IPO Message Board

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Technology Stocks : USAI, 61% stake in Ticketmaster Online-CitySearch IPO

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To: Bald Man from Mars who wrote (159)	12/1/1998 3:35:00 PM
From: SteveG	Read Replies (2) of 391

TMCS IPO price range has just been upped to $11-13. NBMO allows they MAY price it Wednesday for trading on Thurs. (perhaps to head off UBID which is likely Thur for Friday now) I don't see TMCS up less than 20-30 from the offering. Arguably the hottest IPO this month - best quality / highest profile.. Goldman valued TMCS as a non-ebitda USAI asset at $400MM. If it prices at $13, this is $552.5MM, or about $1/share MORE than they currently valued USAI at. Both Goldman and Credit Lyonnais seem to claim they are valuing each post offering dollar of TMCS at .13 and .11 (resp) for USAI. Checking with several analysts, this seems non-sensical - the correct ratio is the previously stated 42.5/153 = .278 of USAI per each TMCS dollar. Media companies are valued at discounted multiples of future EBITDA, but 1) it would be incorrect to value a market monetized asset at some discount when the value is not at ALL unclear, and 2) even if they DID do this, how can they justify an average of 57% discount when industry standard is rarely more than 15-20% discount? Regardless of how an analyst might value TMCS on USAI's books, correct GAAP for greater than 50% ownership is to use consolidation adding to the P&L. Current asset valuation includes TMCS at ~$10/share - which values USAI at it's roughly current $30 [GS at $27, CL at $31, NBMO at $32, for instance]) TMCS at $40 would be an increase of $30 (over current valuation) would add $8.30 to USAI = $38.3. TMCS at $50 would add about $11 to USAI's $30 = $41.

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