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Technology Stocks : AUTOHOME, Inc
ATHM 23.67+1.2%1:56 PM EST
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To: Michael P. Michaud who wrote (6432)3/22/1999 1:08:00 PM
From: ahhaha  Read Replies (1) of 29970
 
I really can't. Too complex for immediate readout. The prime question is whether the deal pulls Comcast out of the ATHM group or whether Road Runner is pulled into ATHM. It remains to be seen what TWX does.

If Comcast leaves, the deal is exceedingly bearish, and ATHM is a house of cards. It is necessary to determine whether the exclusive contract holds with respect to the merged entity if a cable partner merges. Usually such contracts are binding over the merged entity, but the merger wouldn't have been attempted if that was a sticking point. The bearish aspect comes from the creation of a viable broadband alternative. AOL was never ATHM's competition, but this new entity would be.

A further splintering of the market through the formation of an intermediate speed range is also troublesome. QWST is quietly putting in place an impressive long-to-local DSL distribution system and AOL will be jumping on that.

Someone else may attempt to outbid Comcast now that Comcast has demonstrated that UMG is clearly available. If QWST did that, then you have an interesting development. Given that UMG's board likes the deal, the deal will probably hold, but another suitor may make a horse race of it and that would make UMG an interesting option speculation.
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