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Strategies & Market Trends : TradersChoice 2000 -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Jordan who wrote (504)	10/22/1999 9:22:00 AM
From: Jeff Jordan	Read Replies (1) \| Respond to of 604

Stock Report -------------------------------------------------------------------------------- Getting Excited About Excite@Home October 22, 1999 By Tom Taulli Senior Analyst Stock Report Archives On paper, mergers always make sense. There are usually synergies, cost efficiencies, and increased marketshare. One merger that looked particularly bright was that between @Home and Excite, which was struck in May. However, since then, the new entity -- Excite@Home (ATHM) -- has fallen from a high of $99 to $42-13/16. Then again, the Net stocks have been rocky since then, which helps explain some of the fall. But there are other reasons. First of all, the Excite@Home deal was very complex and likely diverted management's attention away from the core business. The second cause may be AT&T, which owns 26 percent of Excite@Home and has 58 percent of the voting power (this was the result of AT&T's purchase of Tele-Communications Inc). In other words, AT&T is running the show. In fact, AT&T will soon be the largest owner of broadband cable pipe -- once its deal for MediaOne is finalized. internetnews.com ExciteAtHome up on AOL deal rumors, but AT&T denies (adds AT&T executive denial, context, updates stock prices) By Eric Auchard NEW YORK, Sept 29 (Reuters) - Shares of ExciteAtHome Corp. ATHM.O jumped 13 percent in heavy trading on Wednesday after speculation revived that shareholder AT&T Corp. T.N was in talks to sell its stake in ExciteAthome to America Online Inc.AOL.N, a move that an AT&T official denied. "The story we're hearing is AOL taking over AtHome from AT&T," one New York Stock Exchange trader said during Wednesday's trading session. However, Leo Hindery, president and chief executive officer of AT&T broadband and Internet services denied that they were in talks to sell their stake in ExciteAtHome to AOL. "Absolutely not. There have been no discussions underway whatsoever," he told Reuters in an interview ahead of a speech Wednesday night he was scheduled to give in Hartford, Conn. "I typically don't comment on things of that sort. But when it's absurd, I do," said Hindery, who also is a veteran cable television industry executive. Several industry sources had cast doubt on the notion that any deal was imminent, noting that reports conflicted on who might be buying whom and that some of the rumors contradicted the public strategy of some of the players. The stock of ExciteAtHome rose 5-1/16 to close at 43-7/16, as 35 million shares changed hands on Wednesday -- about 10 times its average daily volume on the Nasdaq stock market. It was the second most actively traded issue on the exchange. The Redwood City, Calif.-based company declined to comment on the stock move. In a separate statement, it did announce ties to four new cable operators including Cablevision Systems Corp. CVC.A that broadens the reach of the AtHome network. AOL, the top Internet services provider, retreated slightly to end the day down 3/8 of a point at 109-1/2 on the New York Stock Exchange, following a 9 stock price gain on Tuesday that analysts have attributed to the company's brightening outlook. A spokesman for America Online declined to comment. Speaking at a conference Wednesday afternoon in Washington D.C., ExciteAtHome Chairman and Chief Executive Thomas Jermoluk also declined to comment directly on the deal speculation. America Online has failed to reach a deal with AT&T and other major U.S. cable television operators that would allow the nation's largest Internet service provider to offer high-speed consumer Internet links via cable networks. AT&T and its partners have stood by exclusive deals to offer such services through ExciteAtHome, raising fears that AOL will be left behind in the race to offer the new generation Web links. AT&T owns roughly one-third of the stock of ExciteAtHome. Other major holders include Cox Communications COX.N and Comcast Corp. CMCSA.O. AT&T is required by the company's recently revised bylaws to seek approval of at least one of these key partners on potential ExciteAtHome deals. In August, AT&T sought to dampen speculation it was talking to America Online about a deal to give AOL access to AT&T's U.S. high-speed cable television Internet access services. While confirming that talks on an access deal had occurred, AT&T said last month that such talks were no longer in progress. AT&T has consistently said it wants to be in the access business, but not the content business. It has stressed that it is committed to retaining its stake in AtHome, the high-speed Internet programming business, but has declined to comment on rumors it might entertain a deal to dispose of Excite, the Internet media network that is the other half of the business. Responding to this possible scenario, Hindery said in the interview that, "There are no discussions underway to split the company between its content and distribution activities." REUTERS