Paul Allen hasn't been mentioned much lately, except for these two items....Wonder if the analysts' for Goldman Sachs compare notes for MSFT and INSP before they give their "downbeat" opinion....
Subject 29233
paulallen.com
Allen Answers ITV Queries
By STEVE DONOHUE December 4, 2000
Los Angeles -- Charter Communications Inc. chairman Paul Allen toured the Western Show exhibit floor on Wednesday, checking out the latest in interactive-television technology.
Multichannel News caught up with Allen, the Microsoft Corp. co-founder, outside the Scientific-Atlanta Inc. booth for a brief interview about ITV.
"I've been talking about [ITV] for a while, encouraging the manufacturers to upgrade where the platforms are and add capabilities," Allen said. "So it's heartening for me to come here and see the way some of these things have evolved. And I continue to encourage the people making the set-tops to invent the technology. Of course, I have some of my own companies trying to invent things on the software side."
What's holding back the mass deployment of ITV services, Allen was asked.
"Certainly there are integration issues," he replied. "But you're talking about boxes with higher functions, and so there are higher price points. The boxes have to be delivered in volume, and all of the software applications have to be developed. So it's a set of things, but it's going to happen."
Asked if he was interested in acquiring more cable systems, Allen said: "We'll always take a look at opportunities there. I think the way things have shaken out, things have kind of coalesced along the lines of a fewer number of larger companies, and so now you have to think about whether there will be more of those kinds of things in the future.
"And I don't see anything like that imminent today. But we talk to everybody," Allen said.
And what if there's a chance to acquire cable systems from AT&T Corp.? "I really don't know," Allen responded.
When asked if he was negotiating with AT&T Broadband to possibly acquire systems, Allen declined to comment. There has been speculation about big MSOs looking to buy at least some systems from the AT&T unit, spurred by a published report in Broadcasting & Cable's show daily.
Allen was joined Wednesday by several executives from Charter and Digeo, a new interactive-TV-applications company he has formed.
Digeo, which now has about 200 employees, has been quietly building its ITV platform. Allen said the first Digeo rollout will occur next year, beginning on Charter systems.
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Paul Allen protects value of Microsoft stock
By Bloomberg News
news.cnet.com
December 14, 2000, 3:40 p.m. PT
URL: news.cnet.com
WASHINGTON--Billionaire Paul Allen entered into contracts last month that would protect the value of about $3.5 billion of his Microsoft common stock if the company's shares continue falling.
Allen, who helped Microsoft chairman Bill Gates start the Redmond, Wash.-based software giant, has arranged to use stock options in what are known as "zero-cost" collars covering 66.8 million common shares. The arrangements were disclosed in documents filed with the Securities and Exchange Commission.
Allen's moves were prescient, preceding by more than five weeks Microsoft's announcement Thursday that December quarterly revenue and earnings won't meet the company's earlier estimates. Microsoft shares have lost about a quarter of their value since Nov. 8, when the most recent of the options arrangements were completed.
Using sets of options that give Allen the right to sell Microsoft shares at specified prices in the years 2003 to 2005, the collars essentially set a floor for 46 percent of the 143.9 million Microsoft shares Allen has reported holding, guaranteeing that he gets a minimum price for the stock several years from now. In return, Allen entered into options agreements that would require him to surrender some gains if Microsoft shares roughly double or in some cases triple from their current level.
The Microsoft co-founder's use of these techniques, commonly known as hedging, comes after Microsoft shares already have fallen more than 52 percent during 2000. As Microsoft shares have dropped this year, Allen has sold 106 million shares, according to data from the Washington Service, which tracks buying and selling by corporate insiders.
Allen's precautions come as Microsoft faces many questions, caused in part by the Justice Department's antitrust suit to break up the company, which is being appealed. Moreover, Microsoft's market prospects clouded this month as a spate of computer manufacturers reported sluggish consumer sales.
PC makers, including Gateway, Dell Computer and Apple Computer, have all projected weakening demand from consumers. Such projections led Richard Sherlund, a Goldman Sachs analyst who is considered a Microsoft expert, to lower his revenue and earning estimates for the software company.
Microsoft on Thursday confirmed such projections are accurate, saying earnings per share would be 46 cents or 47 cents for the fiscal second quarter ending Dec. 31. Analysts had estimated second-quarter earnings would equal 49 cents a share.
According to the SEC filing, Allen entered into 33 zero-cost collars, each of which involves the use of options known as "puts" and "calls."
Allen purchased puts that give him the right to sell Microsoft stock to another investor at a specified price on dates from November 2003 to November 2005. These prices range from $55.08 a share to $63.24 a share, according to the SEC filing.
At the same time, Allen sold calls, in which he gives another investor the right to buy stock from him if shares rise to a specified price by set dates. These prices range from $108.93 a share to $167.37 a share, the filing said.
In general, Allen would pay for the right to "put" stock to another investor. He would also receive payments from investors who get the right to purchase his shares under a call option. The cost of the put and the payment for the call theoretically cancel each other out. For that reason, these arrangements are known as "zero-cost" collars.
In each collar arrangement, a put is set to expire at the same time as a call. If Microsoft shares trade between the prices set, the contracts simply expire unused.
For example, one of the collars includes put options that let Allen sell 3.35 million shares for $62.35 each in November 2003 and call options that would obligate him to sell the same number of shares at $112.29 each at that time. If the stock were trading at a hypothetical price of $80 on that date, both contracts would expire worthless.
If Microsoft shares continue to languish at current levels, or fall even further, the arrangement guarantees that Allen would get at least $62.35 at that time. The other part of the collar arrangement effectively means Allen would have to sell at $112.29 if shares have risen above that price.
Allen entered into 15 of the collars on Nov. 3 and arranged three more on Nov. 6, the SEC filing said. On Nov. 8, he arranged another 15. The collars are set to come due between November 2003 and November 2005, the SEC filing said |
