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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: randmiser who wrote (26269)	7/16/1999 8:40:00 AM
From: Big Kahuna	Read Replies (3) \| Respond to of 74651

If MSFT does this, would that mean the current shareholders would get some percetage of stock in this new venture? Im curious. Big Kahuna ---------------------------------------------------------------------- Microsoft moves closer to creating tracking stock for Internet businesses By David Bank THE WALL STREET JOURNAL July 16 — Microsoft Corp. is moving closer to creating a stock to track its Microsoft Network properties in an attempt to capitalize on the market mania for pure-play Internet businesses. MICROSOFT HAS BEEN mulling the idea of a tracking stock for several months as a way to fund Internet-related acquisitions and attract talented executives seeking the high valuations of “dot-com” companies. People familiar with the situation said the company may make an announcement as early as next week, when the company holds its annual conference for Wall Street analysts. (Microsoft is a partner in MSNBC.) Greg Maffei, Microsoft's chief financial officer, wouldn't comment on the company's plans. As reported in May, Microsoft considered the creation of a tracking stock for its Internet properties as one way to structure a possible bid for MediaOne Group Inc., the cable company that eventually agreed to be acquired by AT&T Corp. In Microsoft's current thinking, the minority stakes the company holds in several cable and telecommunication companies wouldn't be included in the newly created stock. Microsoft's move would follow those of other companies seeking to keep pace with the fast-moving Internet industry and give investors a chance to profit from Internet assets that are hidden inside more traditional corporate structures. Advertisement Bob Woodward's Shadow: Five Presidents and the Legacy of Watergate Microsoft Chairman Bill Gates told associates at last week's gathering of media moguls in Sun Valley, Idaho, that he now thinks the Internet stock craze will last at least several more years, and expressed envy at the ability of Internet companies to use their stock to lower the cost of their acquisitions. Microsoft has struggled to recruit a chief executive for its Internet businesses, in part because its stock isn't perceived to have the growth potential of some pure Web companies. In a conference call last month, Mr. Maffei said the company would begin to break out revenues and expenses for some of its Internet businesses that previously haven't been reported separately, a move some analysts interpreted as a precursor to the creation of the new stock. The company is scheduled to report fourth quarter and year-end results Monday. Microsoft's MSN.com is one of the top sites on the Web, and includes well-regarded properties such as the Hotmail e-mail service, the Expedia travel site and the CarPoint auto-buying service, as well as dial-up Internet access. The tracking stock may also include Microsoft's WebTV Internet services. Rick Sherlund, an analyst with Goldman Sachs, said the businesses Microsoft is likely to include in the new stock have revenue of between $800 million and $1 billion. With Internet stocks trading at multiples of 50 times revenue or more, Microsoft's new issue could have a value of $50 billion, Mr. Sherlund said. Microsoft as a whole is trading at about 22 times projected calendar-2000 revenue. Mr. Sherlund said the new stock wouldn't significantly affect the value of Microsoft's remaining holdings. The company's market value stands at $482 billion. In Nasdaq Stock Market trading Thursday, Microsoft fell 56.25 cents to $94.375. —Kara Swisher contributed to this article. Copyright © 1999 Dow Jones & Company, Inc. All Rights Reserved.