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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Teri Garner who wrote (47343)	6/30/1999 11:30:00 AM
From: Lane Hall-Witt	Read Replies (1) \| Respond to of 120523

ATHM I bought late yesterday -- still have a lot of "contrarian" in me, even despite the momentum-begets-momentum market we've had for the past several years. If this thing catches a tailwind, I think it'll perform well: there's a big short position. I think the market is still trying to absorb all the news that came out yesterday (most after the bell) and today. (1) Management comfortable with subscriber growth projections for the year. (2) Management projects it will have 25 percent of the ISP market by the end of 2003. (I don't know how on earth they came up with this number, which is incredibly optimistic. I suspect they've figured out how to offer high-speed 24/7 access at a far better price point than AOL: that is, cable access cheaper than AOL subscription plus second phone line.) (3) Management claims it'll achieve 50-50 revenue generation from access (@Home) and media (Excite). The strong contribution from the media side is important because that includes higher margin revenues from advertising and e-commerce. (4) Mary Meeker participated in ATHM's media/analyst confab yesterday and also called ATHM as a favorite pick in an interview with CBS Marketwatch. (5) Today, the House is slated to receive a bipartisan bill that favors T/ATHM in the open-access debate. (6) ATHM and Billpoint are teaming up to implement a person-to-person payment system that's designed to support Excite's classifieds and auction features. I imagine ATHM is still being held back by uncertainty surrounding the open-access issue and by a relative overvaluation on a per-subscriber basis. But its growth projections are huge, and it is expected to turn its first profitable quarter later this year. I bought it as a speculative intermediate hold.