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Technology Stocks : MindSpring Enterprises (MSPG) Another ISP. -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (1373)	9/22/1999 3:56:00 PM
From: Tom_	Read Replies (1) \| Respond to of 1434

Briefing.com's explanation of the pop. MindSpring (MSPG) 28 +1 5/8: ISPs having a good day today, and MSPG is no exception... Group benefitting from AOL announcement yesterday that it is on track for record membership growth...EarthLink (ELNK) made similar comments a few weeks ago...Though MSPG hasn't made such a claim recently, assumption is that with company's new advertising campaign MSPG will also enjoy strong subscriber growth over the next couple of quarters... Could result in positive earnings surprises for the group... MSPG expected to earn $0.03 in the quarter and $0.21 in FY99... But while investors might be pleased with the subscriber growth rates, the threat of lower connectivity prices will continue to loom over MSPG... NetZero, a Calif.-based ISP, offers free service and depends only on ad revenues; Qwest (QWST) plans to bundle free Net access with long-distance calls; and Microsoft (MSFT) continues to talk about slashing rates, perhaps completely, for its MSN service... While Briefing.com not sure the free-Net service model will work in the states, the pressure will be on MSPG to lower its prices... This is particularly problematic for MSPG which derives nearly 84% of its revenues from subscriber fees... Nevertheless, MSPG remains committed to the fee-based business model, as executive vice president, Lance Weatherby, was recently quoted as saying that MSPG "hasn't seen a compelling [free] model that we think works for us." Instead the company will rely on heavy advertising and its reputation for excellent service to drive growth... MindSpring recently received the highest ranking in overall customer satisfaction among Internet Service Providers in an independent study conducted by J.D. Power and Associates... Despite its long-term hurdles, we wouldn't be surprised to see stock extend near-term gains as investors continue to make pre-third quarter earnings bets... With subscriber growth up and fees still in place, MSPG set for a positive surprise... First resistance is in the 32-33 area... But look for this ceiling to hold, as concerns over the viability of the company's (l/t) revenue stream and tax-related selling are likely to result in renewed declines after the earnings are reported (if not sooner). Best wishes, Tom