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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: tinkershaw who wrote (45013)	7/31/2001 1:17:39 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Tinker, Seems we have a bit of juxtapositioning going on here! Essentially, yes. But not entirely. What I disagree on though is that the ad money is necessarily correlated in a manner that would enable us to determine whether or not Gemstar does reside in a large enough jungle to be a Gorilla. Where I haven't switched my opinion is that I still believe the issue about the size of the jungle is settled in the fact that IPG licensing (with no ad revenue) is a mass market. Nothing is needed other than the licensing to make it so. GMST could grow licenses into the 100 million range, yet if the ad market remains much smaller than predicted, GMST will never justify its current valuation. That's a completely different issue. Stock valuation has nothing to with whether or not a type of revenue stream is a function of Gorillahood. It only has to do with whether or not we think there is a reasonable risk/reward proposition of buying the stock at any particular time. Regarding the possibility that Gemstar could grow its licensing revenue to the $100 million range, it had $80 million in the last quarter. With a run rate of $240 million and the number of IPGs doubling this year, there's no question in my mind that the IPG licensing by itself is a mass market. --Mike Buckley