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Technology Stocks : Gemstar Intl (GMST) -- Ignore unavailable to you. Want to Upgrade?

To: FLSTF97 who wrote (2011)	2/15/2000 7:45:00 AM
From: NY Stew	Respond to of 6516

FATBOY, I'm still bullish on GMST's prospects, but I'd be more bullish if I knew the merger would be disallowed. My feelings about the merger have varied widely these past few months from being excited to the one you have expressed. Unable to make a lasting conclusion that I am comfortable with I defer to Henry's judgement and rely on that faith. Regards Stew

To: FLSTF97 who wrote (2011)	2/15/2000 6:38:00 PM
From: NY Stew	Read Replies (4) \| Respond to of 6516

FATBOY, You might want to review the TVGIA CC recap from Direwolf: Nothing at all to be concerned about on the TVGIA CC, IMO. I noticed that a number of GMST analysts such as Arsenio and Gouild asked questions. I beleive that is the first time they have asked questions. They all seemed to know Boylan so obviously someone is doing their homweork. Boylan said that GMST was "in substantive negotiations with Tivo" and "in good faith negotiations at this time" with Replay. He covered a lot of ground, all of which was interesting. In no particlualr order, here are some highlights: The Tv Guide Channel is performing very well. Advertising is at a run rate of over $60 million and grew 40% y/y. It "met or exceeded goals" Guide usage patterns continue very strong. IPGS are now in 3.2 million cable homes in each of the top 10 MSOs and each of the top 25 DMAs. Guides are being added at a rate of 15,000 per day. Release 15, whcih is ad enabled will begin to be downloaded in March. $101 million cash and marketable securities. TV Guide Online doing very well in terms of metrics and usage time and getting a reputation as a top destination for TV info on the web. TV Games is "very close" to adding 3 more states including CA and NY. CA is possible in the next 30-60 days. Now at 3,000 users that are still averaging $1,300 in handle per month. Model calls for breakeven at 200,000 users betting $650 per month. Burn rate is $3 million per month. NTL recently bought the rights to the Super 12 tracks in the UK for $300 million pounds. TV Games has the same thing in the US more or less. Opprotunity for a joint venture with NTL on horse racing is real. Dish conversions of C-Band subs is ahead of plan. 30,000 so far. Dish pays for the equipment. Dish paid $10 million upfront and will pay $250 per conversion. TVGIA also gets a residual of ongoing monthly payments per converted sub, though no numbers were given. Expect less than half of the original 1 million subs to convert as part fo this program. The Magazine effectively had flat EBITDA last year which is quite good considering the planned and unplanned drop in circulation. Circulation declined 9% y/y and 3% sequentially. CPM rose 8%. GMST will advertise Guide Gold Plus on the upcoming TV Guide Awards program on Fox. Boylan has been in Europe discussing international EPG agreements with Flextech/Telewest and BSky, owned or controlled by Liberty Media and News Corp, repsectively. Asia is not as far along but Boylan believes that GMST's deal with Dentsu and CE relationships will mesh well with News and Liberty multichannel holdings in the area including StarTV. S-A guide does not have ads and is a lesser product than current GMST or TVGIA guides. Boylan relayed that the guide, at some early versions, was two hours ahead of schedule on the grid. He attributed this to lack of a patent that S-A was previously using that belongs to GMST. He said it created a customer service nightmare for MSOs who were upset. SSDS is irrelevant, but Knowledgeworkers, Inc, part of SSDS sounds like it might be interesting. Spcecom has $6 million in EBITDA but no cost basis. Sounds like just bleeding the cash out creates the most value to TVGIA. Mentioned the TV guide media vault but I got distracted. MSOs love the EPG as a tool for branding with subs and due to the economics. He said that there are only 4 or 5 programming sevices that have a direct positive ROI for MSOS: Adult, PPV, home shopping, and premium channels. By this he means that the license fee is exceeded by revenue related to the service. In the case of the deal TVGIA is offering to MSOs, the potential return is 12 times the $5 per year in sub fees paid for the license. This goes directly to the argument outlined in yesterday's WSJ about which guide will be used, the CE or the MSO. $31 million in non-cash amortization charges in the qurter for the Tv Guide acquisiton. Those will rise dramatically when Gmst "purchase" TVGIA. Negotiatins to narrow down the documents requested by Justice int he seocnd request have been concluded successfully. He said they would have had to sdeliver "semitrucks" full of paper, like very contract they have for WGN which is over 1,000 or something like that. Once Justice says they are in full compliance, the 20 day HSR window starts. Don't be surprised if Justice aks to extend the 20 day window to better understand and analze the documents provided. Closing in the late second quarter seemed to be the guidance.