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Technology Stocks : Webvan Group (WBVN) -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (195)	6/26/2000 9:18:00 AM
From: egggmann	Respond to of 464

Looks good. Webvan is getting more DC's and eliminating a direct competitor with little overlap. The two companies had basically the same business model building out across the country at the same time but WBVN has a better cash position and higher market cap so it is "bailing out" HOMG by using stock as currency. I like it. WBVN is using about 1/3 of it's stock to buy HOMG which has about 1/3 of the mkt cap of WBVN so there's not much of a premium involved. (not huge anyway) It removes a direct competitor which if you think about it is great. I was worried about HOMG coming into Atlanta because I saw no real way for WBVN to differentiate itself. Not anymore. One interesting question however is just how close HOMG was to opening in Atlanta. If they already sunk a lot of money into an almost opened DC in Atlanta, then what will WBVN do with it?? WBVN says that they only use one DC per urban area for cost savings, by buying HOMG they may be buying a redundant DC in Atlanta. Any thoughts?