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To: Prognosticator who wrote (8739)	10/29/2000 4:05:17 PM
From: saukriver	Respond to of 10309

ATT's $5B investment from MSFT The warrant conversion price is $75/share. Excellent deal in May 1999, but given the closing price of T at $21 5/16 on Friday, I doubt they will exercise those warrants, so they just pissed away $5B. Prog, Actually, although I agree with you that the warrants (excercisable within the next 1.5 years for T shares) appear worthless, weren't the warrants a sweetener on top of the preferred shares? Although the warrants may not be exercised, I think MSFT might still have the preferred shares with a face value of $5B. Microsoft may one day get its $5B back. In the meantime, as you point out, the rate of return on this investment is paltry. (I think the rate of return is actually 5% (quarterly payment of 62.5 cents or $2.50 per year for each $50 preferred share. But I take your point that, if the warrants are worthless, Microsoft in essence could find nothing better to do with its money than invest it at a 5% rate, comparable to May 1999 CD rates.)) The preferred securities, which will have a face value of $5 billion and be priced at $50 per security, will make a quarterly payment of 62.5 cents per security. The preferred securities, which will be convertible into 66.7 million shares of AT&T common stock at a price of $75 per share, will have a maturity of 30 years, and the conversion feature can be terminated, under certain conditions, after three years. Who knows? The preferred shares could have great value in the next 28+ years? I suspect that AT&T may be radically different by that time. Does not appear that Microsoft can call the $5B preferred share investment until May 2029. But does anyone know if Microsoft can ask for its $5B back (presumably, under the liquidation preference most preferred shares carry) in the event of the breakup of AT&T into 4 cos.? Pretty shrewd investment that, for AT&T at least. On this, I have to agree with you. My original point was simply that WIND correctly does not appear to aspire to be a big, fat company making a series of goofy investments like Microsoft. Growing is good, but not to the point where people convince themselves to chuck $5B out the door without any commitment to use your technology. Apparently, AT&T gave Microsoft nothing more than a 5% rate of return and a "willing ear" for its $5B. AT&T shrewdly did not lock itself into using Microsoft's software.

To: Prognosticator who wrote (8739)	10/30/2000 4:49:47 AM
From: Allegoria	Read Replies (1) \| Respond to of 10309

Prognosticator , you noted it was an Excellent deal in May 1999. but in today's investment climate you view that they just pissed away $5B 20/20 hindsight is a wonderful thing isn't it. But in fairness to MSFT investors, all you can argue is how the deal looked in May 1999. Look, if you think that all MSFT bought was a passive investment with no other benefits then you and I are on two different planets. I don't have a clue how to reply to your argument because IMO it borders on the ridiculous. All I can reply is, these deals are made all the time and for very shrewd business reasons. I guess we agree to disagree - politely. So with this line of argument, I guess this announcement by MSFT on their proposed $1B investment will also be viewed as wasted if the share price of News Corp. declines? MSFT will surely not benefit in any other way from this investment...sure, it would be much better to buy back their own shares... 21:09 [MSFT,NWS] MICROSOFT MAY INVEST OVER $1 BLN FOR A 3.5% STAKE IN NEWS CORP'S SKY GLOBAL NETWORKS Good luck, Eric