Uncle Frank- Let me try to put a positive spin on these events.
First Cmgi puts $2 million into Lycos in 1996,which comes out with an ipo that year. Now,not wanting to be dumb,David cashes out 900,000 shares worth $99.3 million cash on 1/27/99. Not satisfied with that return,he cashes out another 350,000 shares of Lycos on 2/5/99 worth $50,000,000.
Now thats what you do with a good investment,a cash cow, you milk it for profits that you can put into other investments.
OK let's look at the math so far, $2 million in, and so far,$149.3 million out, I'm a aggie but that's a +7465% profit so far.
Is he done? Nope
It turns out that since cmgi still owns 20% of Lycos,which in turn ends up holding 30% of the new company ,depending on which day you calulate the holdings,CMGI holds $1,200,000,000 worth of capitalization of the new company,which has a much better business plan than the old Lycos, in that they will continue to use all these engaged sticky site internet users, and sell them boucue stuff over the net.
To sum up---- CMGI under David's astute leadership invests $2 million and strips off $149.3 million cash to be put into other investments,while still holding onto 6% of the new company,that will be creating real cash flow,with this 6% interest worth $1.2 billion market capitalization.
When the market movers and the scared day traders learn how to figure, the price of the much abused CMGI will come back.
GOOD HUNTING (some of you do me a favor and post this over on Raging Bull and Yahoo strings,thanks.)
DAVE DICKERSON |
