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Technology Stocks : CheckFree (CKFR) -- Ignore unavailable to you. Want to Upgrade?

To: Brooks Jackson who wrote (2725)	3/20/1998 9:07:00 PM
From: Robert Gintel	Read Replies (3) \| Respond to of 8545

Brooks: The way I heard it, Citi is putting in capital for a partnership interest in the MSFT venture, which will then use Citi's bill payment processing platform. Reputedly, Citi has sustained major losses from it's early foray into electronic home banking, which only now is beginning to take off, after many years of costly pioneering. So you have the world's richest company, the largest global bank, and the largest credit card processor getting together to mount a formidable effort to capture a good hunk of this business. On the other side you have IBM, most of the major banks, Intuit, and little Checkfree seemingly well ahead and entrenched with customer contracts, established links, and an efficient system already operational with over 2 million individual customers and a growing number of sign-ons with major billers. Watching this drama play out will be interesting, to put it mildly. Not every investor, large or small, will have the stomach for it, and some will bail out as others have already done. Like you and others here, I intend to stick it out and give our team all my support. I must respectfully disagree with some of you regarding the merits of a stock buyback program. I think it's another weapon CKFR should have in it's arsenal to enhance shareholder value. It will do more over the long term, than over the short term. Checkfree has over the years, in effect, watered it's stock and diluted the future potential of its stock by issuing common shares in exchange for stock options, corporate acquisitions, and now warrants to Integrion. It seems to me Checkfree needs to shrink it's capitalization and should take advantage of any future market weakness to do so. I had this discussion with senior management a year ago when the stock was $10. At the time the company didn't have the cash flow, or the business as securely locked up as it appears now to have. Checkfree has approximately $65 million in cash and virually no debt. The company is cash positive, and probably earning money right now. The major capital expenditures have been made, and the prospects are for significant cash inflows in the months and years ahead. Why wait for several quarters of earnings, and risk not being able to repurchase shares for the company treasury at these levels? I am not suggesting cutting back on vital research or marketing expenditures, but with long term interest rates at historically low levels and what seems to be an assured rapid growth in revenues and cash earnings, it makes sense to me to leverage the company somewhat, buy in shares, get rid of the weak holders, and cut up the pie into fewer and larger pieces for those who remain.