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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: TraderTerry who wrote (11381)	7/2/1999 3:10:00 PM
From: Jenne	Read Replies (1) \| Respond to of 19700

Enterprising Investors CMGI Inc. (CMGI) by Juliana Tillema July 2, 1999 Internet investor CMGI Inc. (CMGI) announced on Tuesday June, 29 that it would acquire 83% of Compaq Computer Corp.'s (CPQ) AltaVista unit for approximately $2.3 billion in stock. CMGI has said it will take AltaVista public soon, but no date has been set for the IPO, reported the Wall Street Journal on June 29. According to Media Metrix Inc. (MMXI), the research firm that tracks data on Internet usage, AltaVista ranks 10th among Web sites in terms of unique visitors. Immediately after the news of the acquisition broke, shares of CMGI rose almost 13 points to $110 3/8. CMGI manages a portfolio of wholly owned operating companies focused on the Internet (the Internet Group) and direct marketing. The company also invests in emerging Internet-related businesses through its CMG@Ventures affiliates. Wall Street analysts have recently expressed positive investment opinions of CMGI Inc. Prudential Securities Paul L. Merenbloom and Aydin O. Tuncer of Prudential Securities gave shares of CMGI a STRONG BUY (High-Risk) rating on June 18, listing a 12-month price target of $140. They say, "noting the extreme volatility of CMGI's shares — based both on market conditions and momentum activity, we firmly believe that CMGI shares are cheap relative to its potential at current levels and should be aggressively acquired by investors willing to accept high risk and speculative stock characteristics." The analysts are positive about CMGI as a "unique Internet-centric investment vehicle" and are encouraged by the more than 40 companies in the CMGI network, including Amazon.com Inc. (AMZN), Yahoo! Inc. (YHOO), Lycos Inc. (LCOS), Open Market Inc. (OMKT), Premiere Technologies Inc. (PTEK), Informix Corp. (IFMX), and USWeb/CKS (USWB). The "complex network of investments and co-investors" has led to "an open-ended mutual funds structure with venture investment return objectives and history," the analysts say. Despite Prudential's positive outlook, Merenbloom and Tuncer say that frequent additions and realignments of the company's portfolio make it difficult to forecast revenues, earnings, losses and cash flows. However, each of the investments and operating companies are tightly managed and budgeted and Merenbloom and Tuncer believe "the only reasonable way to value CMGI lies in the analysis of the company's public and private portfolios." Dain Rauscher Wessels Peggy Ledvina and Mark Rupe at Dain Rauscher Wessels gave CMGI a BUY rating on June 11, with a price target of $150. They agree that valuation of the company is difficult, but they "are very comfortable with the numbers the company achieved during the quarter." They believe CMGI's key strength can be found in the "synergy between its core holdings." The analysts highlight some of the important events of the most recent quarter, including selling the CMGI Direct Business unit to Marketing Services Group Inc. (MSGI) and discontinuing the company's database services segment. Also, CMGI invested in 10 Internet start-ups, increased its ownership in Magnitude Network to 92% from 23%, and increased its value through the successful IPO of Critical Path, the analysts report. CMGI's success has drawn more than 1500 business plans each month to the CMGI@Ventures team. "The company anticipates this trend could result in two to four new investments per month, one acquisition per month and the expansion of @Ventures to include @Ventures IV by year end 1999 and an @Ventures Crossover fund in Fall 1999," say Ledvina and Rupe. Hambrecht & Quist Paul W. Noglows of Hambrecht & Quist also maintains his BUY rating on CMGI citing strong quarterly operating results. "Net revenues from wholly-owned subsidiaries including ADSmart, Magnitude Network, NaviNet [and] Planet Direct increased 141% to $44 million from $18 million in the prior year period…. Other than the $859,000 sale of Yahoo!/GeoCities stock, the company did not sell any other stock as compared to the $54 million sale of Lycos, Amazon.com, and GeoCities stock in the previous quarter," Noglows reports. Noglows does not believe that all of CMGI's investments will be winners, but he does point out that the company's "cumulative return on investment from @Ventures is roughly 4,860% from only 9 liquidity events." While CMGI is like an Internet mutual fund, Noglows says, "unlike many mutual funds, CMGI's collection of investments represent a carefully structured portfolio of Internet companies that in many cases share significant direct operating synergy providing us further confidence that its portfolio strategy will enable the company to weather market downturns." Noglows concludes CMGI's diluted investment stakes in Lycos, Yahoo!, and other public holdings is approximately $1.4 billion, while he estimates the value of the top 17 private investments at $11 billion. The analyst believes CMGI represents "an attractive long-term investment." Wall Street analysts favor CMGI as a solid investor in a broad range of Internet companies and services; CMGI's recent acquisition of Compaq's AltaVista has only confirmed the company's most favorable status.