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Technology Stocks : 24/7 Media, Inc. (TFSM) -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (304)	11/16/1999 9:05:00 AM
From: Richard Tai	Read Replies (1) \| Respond to of 669

these are excerpts from blodget's most recent report on tfsm. so it looks like at least one guy on the street is wondering a little himself. 24/7 Media – 10 November 1999 the stock remains undervalued relative to its peers by a number of methodologies. The recent flurry of deals in the sector also obviously make 24/7 an attractive acquisition candidate. In response to a question about the competitive landscape, management mentioned that it would consider attractive alternatives to “maximize shareholder value”. 24/7 is trading at approximately 8x 2000E revenue, as compared to Doubleclick, which is trading at about 22x consensus 2000E revenues. (We would point out that the Doubleclick multiple could be overstated, as consensus revenues do not fully reflect the NetGravity and Abacus Direct acquisitions.) Compared to 24/7, Doubleclick has 5x the scale, 2x the gross margin, 2x-3x the long-term operating margin, and is nearing profitability. We do not think the valuation discrepancy should necessarily be as stark as it currently is, however, especially in light of Flycast's sale to CMGI for approximately 18x 2000E consensus revenues. We believe 24/7 has substantial value on a breakup basis as well. 24/7 owns 1.6 million shares of China.com and 5.2 million shares of Shopnow.com, together worth approximately $170 million. The public market value of Yesmail (its most direct competitor) suggests $45 per email address, or a valuation of almost $600 million for 24/7 Mail. $1.3 billion in total market value for 24/7 less its public investments and the value of the Mail business implies a residual value of only $530 million for the Ad Network business, or only 3.8x the over $140 million we expect it will generate next year.