It's All or Nothing, Boys...
As TWX's stock has more than doubled this year
it would make great currency of a Lycos buyout.
But many of you may be asking, what's taking so
long? We've been discussing buyout rumors for
over a year, and little has happened. I think
the "problem" is CMGI. Lycos has about $200mil
so it does no need the money, but it could use
a strategic partner or parent to continue growing
as the Internet crosses over into other Mediums.
TWX would be a great fit, but like Bertellsman,
these guys want a piece of the action, and not the
whole pie. Enter CMGI, the major shareholder in
Lycos. They want to cash in on their investment,
and are probably pushing for an outright buyer,
which may be hard to come by despite what we saw
in the XCIT/ATHM deal. Bottom line is, if anyone
just goes for a piece of Lycos, that may not help
the stock price much, and CMGI knows it. CMGI
does'nt want another partner sitting at the table;
playing interference if and when then find a buyout
suitor; thus CMGI is holding out for a bigger all out deal.
If MSFT is in the running after losing on XCIT, they may
have to wait until the worst of the Federal Court Trail is
over before announcing it's intentions. We may not
hear of any deal for a while yet, leaving Lycos to
trade at the whims of the other Internet stocks.
If the Internet Euphoria abates, don't expect Lycos
to continue pissing into the wind. I'll keep my
position long for now, especially since I believe
this week will be kind to all things internet, but
I won't be doubling up my position anytime soon.
I also would not be suprised if we don't see 10%
moves on no news as many shorts have turned long
and without their short covering, the stock should
trade with a lot less volitility. |
