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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Ben Wa who wrote (4728)	2/4/2000 4:33:00 PM
From: RockyBalboa	Respond to of 19428

Thanks. Good timing. I'll pay a look at the kart.

To: Ben Wa who wrote (4728)	2/4/2000 7:48:00 PM
From: Sir Auric Goldfinger	Read Replies (1) \| Respond to of 19428

SMARTMONEY.COM: What's Next? Giving Analysts The Finger? By Paul R. La Monica Smartmoney.com NEW YORK (Dow Jones)--It isn't often that a CEO tells a Wall Street analyst to kiss his ass on national television. Welcome to investor relations, World Wrestling Federation (WWFE)-style. Vince McMahon is not your ordinary CEO. And the WWF certainly is not your ordinary company. On CNBC Thursday afternoon, McMahon told Wall Street in a typically blunt fashion what it could do when he was asked about downgrades by analysts at Merrill Lynch and Wit Capital (two of the firms that helped bring the WWF public back in October). Now, I'd argue that 99% of CEOs probably would love to tell analysts to do the same thing every now and then, but a national cable network was probably a poor choice of venue for Vince to express this thought. Maybe he got confused and thought he was on WWF "Smackdown!" or something. Nonetheless, you could hardly blame McMahon for being exasperated. It has been a difficult few months for him and the WWF. Since the company went public (on the same day that Martha Stewart Living (MSO) did, no less), Wall Street has basically placed the WWF in a sleeper hold (I will shamelessly admit that I am going to try to use as much wrestling terminology in this column as my editor will let me get away with ... with the exception of the obvious and overused "body slam"). The stock priced at 17 and quickly rose to 34 on its first day of trading. But that was the peak for the WWF. It closed on its first day of trading at 25 1/4 and since then it's been a major dog, dropping 54% and hitting an all-time low today of 11 1/2. Why was McMahon making business news by inviting stuffy equity analysts to apply their lips to his behind? Well, the WWF made the curious announcement that it was starting up a new football league called the XFL. Investors hated the news, driving the stock price down 25.8%. The two analyst downgrades were basically the Wall Street equivalent of someone taking a steel chair and smashing it over McMahon's head. So what now for WWF investors? Well, at the risk of being labeled a prime example of a morally bankrupt generation because I'm defending the WWF, I do have to say that this stock seems to be ridiculously undervalued right now. To borrow a phrase from the popular wrestler The Rock (aka The People's Champion), here's my message to the nay-saying analysts and WWF short sellers: "Know your role and shut your mouth! It doesn't matter what you think!" First let me get a little soapbox sermonizing out of the way. I am no longer a huge WWF fan. I used to watch it all the time when I was a kid, in those more innocent days when Hulk Hogan, Rowdy Roddy Piper and Andre the Giant ruled the ring. My brother and I would beg (usually successfully) our Mom to shell out the $35 or so for pay-per-view events like "Wrestlemania." It was hokey and mindless entertainment, but relatively harmless, I'd like to think. But while I'll admit that I still occasionally turn on wrestling, I think much of the "content" is now repugnant. It's risque and gratuitously violent. I wouldn't let a young child watch. But that's not really the point for an investor. Is the WWF any worse than say, Marlboro-selling Philip Morris (MO) or Budweiser-hawking Anheuser Busch (BUD)? How about Nike (NKE) and its overpriced sneakers and deplorable labor practices? Playboy (PLA) and its objectification of women? If you choose not to invest in something that you find ethically unacceptable that's your right. There's always Ben & Jerry's (BJICA) - now trading 24% below its 52-week high. Be my guest. There really is no denying what a marketing juggernaut the WWF is. Cable ratings for WWF events are huge. The company sold $81.4 million worth of branded merchandise in its last fiscal year (32% of the WWF's total revenue). According to Merrill Lynch estimates, merchandise sales should increase 42.5% to $116 million this year. And frightening as it may be to the intellectually pretentious and morally righteous, the WWF has even made a dent on the New York Times Bestseller List: two WWF wrestlers currently occupy the #1 and #3 spots on the nonfiction hardcover list, ahead of Pulitzer Prize-winner Frank McCourt, among other noted writers. The bottom line here is that the stock looks really cheap when you consider its fundamentals. At 11 1/2, it is trading at just 15 times estimated fiscal 2000 earnings (ending in April), and profits are expected to increase 27%. Now of course, the WWF is taking a huge risk with its football league. Fears of all the money the WWF will spend on this venture were essentially what caused the analyst downgrades and sell-off yesterday. The WWF has said that it intends to launch its football league in February 2001 with eight teams in major cities such as New York and Los Angeles. No broadcasting information was announced. And the WWF will own all the teams and take on the entire burden of the start-up costs itself. Can the XFL - which stands for extreme football league - succeed when many other attempts to launch rival football leagues have failed? If the WWF simply throws money at this new league and doesn't get anything out of it then it will, of course, be forced to take a huge write-off of its losses some day. Nobody wants to see that. The stock took another hit Friday, but there are plenty of loyal fans who have become vocally supportive shareholders. A quick glance at the Yahoo Finance and Raging Bull message boards for the WWF shows a curious mix of discussion about the stock's fundamentals and the WWF's bizarre soap-opera-like plotlines. After posting a message of my own asking for some input from shareholders, I received several enthusiastic responses. Here's what some of the WWF longs had to say about the company: "The big money makers on Wall Street envision a bunch of steroid-taking guys with pink tights running around pretending to really fight. It is seen as a fad and therefore, despite its strong fundamentals and earnings figures, it is being ignored for the most part," says Bill Smith, an investor from Levittown, Pennsylvania. He makes a great point here. As tempting as it may be to call wrestling a fad, the WWF has been around a long time. We're not talking Pokemon or Teenage Mutant Ninja Turtles here. "It's somewhat ludicrous how much money this company makes and how low the stock is priced. The problem with the WWF stock is that there is no institutional interest," says Brian Markowitz from New York. Very true. Just 2% of the company's shares are held by institutions (10 mutual funds own the stock, according to Morningstar). A lack of support from investing professionals often makes it tough for a company to gain credibility. Investors are optimistic about prospects for the WWF to ink broadcasting contracts with larger networks once its contract with USA Networks (USAI) expires this year. (WWF events also air on the UPN network co-owned by Viacom (VIA.B) and Chris-Craft Industries (CCN).) Will the big networks dare to embrace wrestling? I'm not so sure. But the WWF has done just fine on UPN and USA. As long as ratings remain high, arenas featuring these events sell out and WWF compact disks and t-shirts keep flying off the shelves of retailers, it seems to me that this is an incredibly attractive stock with clear prospects for earnings and revenue growth. And that's something you can't really say for a score of business-to-business and Linux companies that have been embraced by investors trying to cash in on the latest high-tech trend. If you've ever watched a WWF event, you know that there's always one incredibly cheesy match in which, just when it looks like the crowd's favorite wrestler is going to be pinned and defeated, he kicks out a nanosecond before the ref counts three. I have a feeling that the WWF may be able to pull off a similar miracle comeback of its own. Wall Street may have the WWF in a choke-hold right now, but I think McMahon will find a way out of it. Although he might want to start acting more cordial to analysts working for big investment banks. They can be a lot more dangerous than wrestlers, you know. For more information and analysis of companies and mutual funds, visit SmartMoney.com at smartmoney.com