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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: 10K a day who wrote (22047)	5/11/2000 5:18:00 AM
From: Big Dog	Read Replies (1) \| Respond to of 29970

An Out for Beleaguered Excite@Home Investors? By Jim Seymour Special to TheStreet.com 5/9/00 3:27 PM ET Where are technology stocks headed? Find out what Jim Seymour thinks when he shares his views on the TheStreet.com TV Show this week, Saturday at 10 a.m. and 6 p.m. and Sunday at 10 a.m. (ET), on the Fox News Channel. Check your local cable guide for listings. ------------------------------------------------------------------------ There's a hot rumor swirling through the markets Wednesday that Comcast (CMCSA:Nasdaq - news - boards) CEO Brian Roberts is about to make a huge takeout offer for Excite@Home (ATHM:Nasdaq - news - boards). Comcast would in effect flip the terms of its March deal with AT&T (T:NYSE - news - boards) over operating control of the company, taking over AT&T's role in charge. Although after its recent moves to acquire voting control, most think of ATHM as being owned as well as controlled by AT&T, in fact, Comcast, Cox Communications (COX:NYSE - news - boards) and Cablevision Systems (CVC:NYSE - news - boards) still have substantial stakes. With demand for high-speed services exploding -- and with a relatively deep pocket and borrowing ability -- Comcast could use ownership of Excite@Home as a powerful competitive weapon. There are few technical mysteries left in making Net access via cable work; now it's a matter of build-out, which is going to require huge capital investments. (For example, in its first-quarter results reported a week ago, Comcast confirmed a $186 million loss caused, in large part, because its capital investment in upgrading its systems for digital television and fast Net access had ballooned 49% to $289.1 million during the quarter.) And that will require an experienced cable operator in charge, some might argue, rather than one of the Johnny-come-lately giants -- Paul Allen's Charter Communications (CHTR:Nasdaq - news - boards), AT&T, even America Online (AOL:NYSE - news - boards) -- that have pushed their way into the cable business over the past few years. AT&T could rely on Excite@Home's portal and customer list to help build its cable-network-services business, over which it wants to deliver IP telephony and other digital services to the home, by becoming a customer of Comcast. But what AT&T really needs now are direct relationships with cable companies, not just with a company like ATHM, which agrees with existing cable systems to deliver a Net-connection service over their networks, in revenue-sharing agreements. There is no confirmation yet from Comcast, Excite@Home or AT&T that this rumor is real. But sources I've talked with believe it probably is -- and it makes sense. For Excite@Home's public shareholders, the deal would finally provide an exit strategy from a stock mired deep in the doldrums -- and with few obvious ways to rebuild shareholder value. Trading up today at noon about 5 1/2 on the rumor, from its recent home in the upper teens, Excite@Home has fallen a long, long way. Uncertainties over AT&T's plans for the cable-access company haven't helped over the past several months. Neither has the departure of a long list of top management. Chairman Tom Jermoluk announced Monday his departure to manage his other investments. He was preceded by Adam Grosser, president of subscriber networks, last week, and senior VP and general counsel David Pine, who announced he'll be leaving in June for a top job at Handspring, the Palm Computing (PALM:Nasdaq - news - boards) competitor. Executive VP Brett Bullington has said he's cutting back on his time at Excite@Home. And Todd Harmon, VP for finance in ATHM's media and marketing division, is also reportedly leaving. For AT&T, this would be a good deal, too, a way to shed an operation that has been troubling for the phone giant from the beginning, and which remains a distraction. AT&T's business is pipes, not content, and the sooner CEO Mike Armstrong realizes that and refocuses the company, the sooner T can start crawling out of the hole it has dug for itself. Again, remember that for now, this is only a rumor. Bloomberg has reported that Roberts said today at the annual meeting of the National Cable Television Association in New Orleans that he'd be happy to buy A&T's 56% share, and the usual sources say the deal looks good. But it's not an arb play yet -- especially not for amateurs. thestreet.com