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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: levy who wrote (20366)	7/27/2000 2:15:35 PM
From: KLP	Read Replies (2) \| Respond to of 28311

Article from CBSMarketwatch today 12noon EST..(and levy, no need for the stress ball right now....just calmly reading and gathering info....) KLP cbs.marketwatch.com InfoSpace to acquire Go2Net Integration issues may loom ahead, some say By August Cole & Bambi Francisco, CBS.MarketWatch.com Last Update: 12:20 PM ET Jul 27, 2000 NewsWatch Latest headlines SEATTLE (CBS.MW) -- Shares of InfoSpace plunged 24 percent Thursday after the wireless Internet infrastructure company's announcement to buy Go2Net for $2.7 billion in stock undermined its better-than-expected quarterly reports. InfoSpace (INSP: news, msgs) fell 11 5/8 to 36 as 9.7 million shares changed hands. In sympathy with its proposed partner, Go2Net (GNET: news, msgs) fell from pre-market highs of 68, adding 3 5/16, or 4 percent, to 62 in recent trading. Safa Rashtchy, an analyst at U.S. Bancorp Piper Jaffray, downgraded InfoSpace to "buy" from "strong buy," citing concerns the combined companies may face integration challenges before reaping the rewards of broadband synergies. Moreover, the price tag was deemed a bit rich. "InfoSpace stock may be down short-term due to the premium paid for Go2Net, leading to continued stock volatility," said Michael Graham, an analyst at Robertson Stephens. "We suspect the next big move in the stock will come when revenue from the wireless rollouts becomes big, which we estimate will be in the fourth quarter." Graham estimates that InfoSpace generated $3.7 million in revenue from licensing and transaction fees paid by wireless carriers in the just reported quarter. By the fourth quarter of this year, Graham predicts wireless revenue could grow to $14.2 million, or about 37 percent of his estimated $38.4 million in total revenue. Graham expects revenue for the 2000 to reach $110 million, excluding Go2Net's contribution. That estimate was bumped up after InfoSpace reported second-quarter results Wednesday. InfoSpace posted a loss of 1 cent a share on revenue of $24.6 million. As expected, the results beat expectations but analysts have been hard-pressed to find a catalyst to drive shares higher. Executives of both InfoSpace and Go2Net urged analysts and the investment community to consider the synergies of the combined companies. Deal details According to the terms of the deal, InfoSpace will offer 1.82 shares for each Go2Net share, representing a 45 percent premium to its Wednesday Nasdaq closing price of 60 9/16. The companies said the deal will allow InfoSpace, whose name the post-merger company will adopt, to offer a broader range of e-commerce services to an anticipated combined base of more than 2 million merchants. "There are a lot of cross-selling opportunities," said InfoSpace Chairman Arun Sarin in an interview with CBS.MarketWatch.com. Go2Net offers back-end products to merchants, such as payment services, while InfoSpace has front-end products such as shopping carts and other storefront offerings. Moreover, the combined company will have a strong broadband distribution platform. InfoSpace has relationships with wireless carriers, while Go2Net has partnerships with cable and digital subscriber line service providers. "The next big growth area for InfoSpace is the delivery of our platform of services over broadband, enabling today's unified communications companies to deliver one integrated user experience across all devices and all networks," said InfoSpace Chairman Naveen Jain. The deal is set to close in the fourth quarter of 2000, according to a press release. The deal, according to the companies, will boost bottom-line results for InfoSpace immediately. The executive lineup at the new company will take shape under the leadership of InfoSpace's Jain, who will be chairman, and Go2Net's Russell Horowitz, who will be vice chairman and president. Sarin will be vice chairman and CEO. See Net stocks.

To: levy who wrote (20366)	7/27/2000 2:16:56 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 28311

so why is insp trading down as much as it is in this deal?...... Levy, this a simple arbitrage play. Sell/short the acquirer and buy the acquiree. And since it occurred just as it appeared that INSP was preparing to break through $60-65 resistance based upon their less than expected loss and tremendous revenue gains, people suddenly abandoned ship on the stock and sent it back to the doghouse, that is.. previous April lows. Now all the gains and consolidation INSP has made since April has become even more resistance to higher highs and lower lows. THAT'S WHY they should have waited until until after the technical picture on the stock was more favorable. I just see no compelling reason that they had to nullify all the positive impact from their better than expected earnings, just to play into the hands of the arbitrageurs. The more I think about it, the more upset I get. I'm upset because I get the sense that I'm looking at dead money on GNET until INSP can get the blessing of the street institutions who will force the arbitrageurs to cover their short positions in INSP. Btw, INSP commentary from Munder Net-Net fund coming up directly on CNBC. Regards, Ron