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Technology Stocks : Banyan (BNYN $8.75) as an internet play -- Ignore unavailable to you. Want to Upgrade?

To: Jim Muskett who wrote (993)	3/1/2000 10:19:00 PM
From: Ashley800	Respond to of 1006

Jim, If you like switchboard, buy switchboard. The parent - bnyn, or the mothership as you referred to it, might drop like a rock tomorrow and Friday. Check out the charts for MALL, DBCC and DLIA, as they were once Mothership's themselves. Some parents do continue to rise after the spinoff, namely HNCS. My guess is at least 2 or 3 things need to be present for that to happen: 1) A red hot IPO, 2) Parent ownership to be 80% or higher AFTER spinoff (for example, COMS will still own 90+ % of PALM) and 3rd and most important, the shareholders of the Mother will need to be receiving shares of the spinoff (usually 6 months down the road) as a tax free dividend. BNYN will NOT be issuing stock of SWBD to current or future BNYN holders. SWBD may - or may not be a Hot IPO as a double isn't considered all that amazing anymore. BNYN currently owns about 50% of SWBD and will own about 43% after the IPO. IMHO this is not enough to keep BNYN at any level above 20. For the record, I am very short BNYN and frankly not a bit concerned as it has clearly topped and is making lower lows each day. Play it smart and protect yourself just incase I'm right. Good luck. Dave

To: Jim Muskett who wrote (993)	3/1/2000 10:49:00 PM
From: Ashley800	Read Replies (1) \| Respond to of 1006

Jim, Just read the article link you posted. I think the article is misleading, here's why: To achieve that share price, Switchboard would have to gain 650% on its first day, which would make it the best-performing IPO in history. We like the stock and the current market for IPOs is still overheated, but we think a more realistic situation is that the offering prices around $14, which as the top end of the price range, and the stock sees a 300% gain in its first few days of trading. Banyan's share would then be worth $549 million. Based on an industry-low multiple on its projected revenue streams the company?s remaining network services business, which is the core of its operations, is then worth $265 million. That alone equals $33.54 per share, which is more than Banyan's current share price. Backing out $46.5 million in cash and $83 million for its holdings in Software.com (NASDAQ: SWCM - Quotes, News, Boards), Banyan is still undervalued. Using back of the napkin math, if SWBD trades at $42 and has 5.5 million shares, it's market cap is $231 mil. BNYN will own approx 43% (from memory so please correct me if I'm wrong) of the 231 mil or about 100 mil. If BNYN were to liquidate its interest in SWBD, they would pay tax on their gain. Therefore the 100mil needs to be discounted by at least 40%. So at $42, swbd only adds about 60mil to bnyn marketcap. BNYN has 22.5 million shares outstanding, so 60mil only adds about $2.67 per share to BNYN. Add another $5 for cash on hand, $2 for their stake in software.com and maybe $15 for BNYN core biz and I come out with about $24. I think SWBD will have a hard time getting and staying at $42 (but not impossible) and BNYN core could be worth as little as $10 or even $8. So on the low side, BNYN could trade as low as $17. Good luck.