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Technology Stocks : Intermedia Communications ICIX -- Ignore unavailable to you. Want to Upgrade?

To: pavlov2 who wrote (270)	12/14/2000 3:33:23 PM
From: fastcats	Read Replies (2) \| Respond to of 313

I think this sums it up pretty well. It's all about risk... dailynews.yahoo.com Thursday December 14 2:13 PM ET Intermedia Falls on Nervousness LOS ANGELES (Reuters) - Shares of Intermedia Communications Inc. (NasdaqNM:ICIX - news) fell 40 percent on Thursday to their lowest level in more than three years due to fresh doubts about WorldCom's proposed takeover of the telecommunications operator. A Delaware judge on Wednesday declined to block the merger but warned that the deal could give rise to ``monetary damages.'' Minority shareholders of Digex Inc. (NasdaqNM:DIGX - news), which is controlled by Intermedia, had sued to stop the deal. J.P. Morgan analyst Christopher Barden said the court ruling had created new uncertainty about the beleaguered deal. ''There's the liability that this could change WorldCom's mind, or if they do the deal, that there's lower potential for return or a longer time for returns,'' he said. Intermedia shares fell $5 to $7-1/4, their lowest level since spring 1997, before recouping a bit to $7-15/16 in afternoon trade on the Nasdaq stock market. Intermedia owns 55 percent of Digex stock and controls 94 percent of Digex's shareholder votes. The court ruling came after a Nov. 29 hearing on a lawsuit brought by Digex minority holders who alleged that Intermedia had shortchanged them with ``bait-and-switch tactics,'' first offering its Digex stake for sale and then substituting Intermedia instead. The proposed takeover of Intermedia by WorldCom Inc. (NasdaqNM:WCOM - news), the No. 2 U.S. long-distance company, has been surrounded by controversy and doubt, with heavy involvement by arbitrage traders speculating on whether it will ever go through. One trader said, ``WorldCom is sitting here with an unknown liability. It has the ability to walk away, renegotiate, or pay up some unknown amount to make Digex happy. There's a lot of uncertainty and doubt.'' WorldCom has targeted Digex, which offers storage and maintenance facilities to run Internet sites, as a key part of its future growth strategy. Acquiring Intermedia is a means of getting to Digex's assets, analysts said. Yet Intermedia shares were down sharply, while Digex shares rose 2/8 to $29-5/8. WorldCom fell 5/16 to $17-7/8. Observers said doubt over the WorldCom takeover was worse news for Intermedia, while Digex was still considered a prize that could be snatched up by a WorldCom competitor. Analysts said they had concerns about Intermedia's future financial performance if WorldCom decided to scrap the deal. WorldCom won conditional approval for the deal from the U.S. Justice Department (news - web sites) in November. The deal has been criticized by some analysts who believe WorldCom is paying too much. Disclosure: Too long for too long!

To: pavlov2 who wrote (270)	12/14/2000 5:29:51 PM
From: zyx1996	Read Replies (2) \| Respond to of 313

the price wcom will pay is the same $39 does not matter then or now. I think what happened today is people bet that wcom will walk away due to potential $2b damage. But the irrational of the market is evident that the digx value in icix is now 3 times as much as icix itself. since icix's market cap is now at $383 million and digx is at $2013 million, so 55% of $2013 is about $1107, which translates to $20 share price, ie the digx value in icix alone is $20. I think professionals will come in push the difference narrower or icix will do something to unlock the value. hold onto your shares or buy more, it will pay out eventually. ZG