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

To: TLindt who wrote (4211)	5/18/1998 4:25:00 PM
From: pat mudge	Read Replies (2) \| Respond to of 8545

My broker got it from other analysts. Lehman put out an interior memo to their clients under the guise of "thoughts on banking conference. . ." Guess there was one last week. At any rate, they re-iterated their hold based on the stock being over-valued, that the potential wasn't there, the market sluggish, yaddy, yaddy, yaddy. . . Other analysts responded (to my broker) by saying perhaps Lehman's motives were questionable. pat

To: TLindt who wrote (4211)	5/18/1998 4:32:00 PM
From: SeveCords	Read Replies (3) \| Respond to of 8545

I think that the stock is off on analyst comments from Karl Keirstead of Lehman Brothers, Checkfree's former investment bankers. He was at the Faulkner & Grey Conference in Atlanta last week and issued comments that have been viewed negatively by the investors. He is beginning to sound like Gary Craft from Robertson Stephens, which further heightens the nervousness. There was no downgrade. This conference is not supposed to be one the more important conferences in the industry. One has to wonder who was in attendance. Keirstead claims on one hand that Integrion is behind in their installations with only 2 banks live (Nationsbank and BancOne, yet ,on the other hand he is claiming that bankers are complaining of fixed rate pricing. Well, it seems to me that if you are not already implemented, you wouldn't be complaining fixed rate per subscriber pricing unless you are a small player. Ultimately in this business, way off in the future, I would believe that higher volumes will beget lower prices, but you have to be doing the volume first! As far as Integrion being behind, I don't know where he came up with that seeing that Integrion only started in March and the Genesis platform was supposed to take 18 months to complete. He even indicated that spending on Y2K is also causing some of the slowdown, but I was under the assumption that banks supposed to be Y2K compliant by the end of 1999? Wouldn't those resources already be allocated? Also, even if he is right, then it only favors Checkfree's case since anyone having Y2K problems at this point is more likely to outsource a solution. It is strange that in his report he first admits that MSFDC doesn't have back end payment processing, a remittance engine, and more importantly doesn't provide customer care. In my mind that has to be worth something. That's how MSFT can claim to give it away for free. He also claims that MSFDC has 12 contracts, but participating in a pilot is a lot different than a contract for services. BancOne may be on the advisory board of MSFDC and participating in pilot, but that doesn't mean that they are going to use the MSFDC product if and when they have one. That's why they just announced a bill payment and bill presentment agreement with Checkfree on May 15th. The same goes for Merrill Lynch who is already using Checkfree for bill processing. Their involvement with MSFDC is in the form of a pilot project. Maybe, I had one too many cocktails this weekend, but there is a difference between a signed contract and a signed pilot program. At any rate, I don't think bill presentment will be a totally exclusive game. If you can aggregate bills, someone will allow you to present them. Keirstead , in this report also states that MSFT executives have claimed that they have an advantage with better software for web authoring. That may be a valid point, but web authoring software is almost a commodity item today and will be more so in the future. You also have to be running NT servers as far as I understand it along with a full suite of, you guessed it: Microsoft tools like Word, Excel and Powerpoint. Lets face it, the reason this business suddenly interests Microsoft is due to potential NT server sales to banks which historically have been UNIX country. The reason it suddenly interests First Data is that half their top line is earned by delivering paper credit card statements. If the world goes to electronic delivery, what happens to them? Finally, Keirstead erroneously indicates that many of Checkfree's contracts are coming up for renegotiation by the end of the year. That is not true either as most of their major bank contracts aren't up for at least another year. If anyone knows anything different, pleases inform me. As Ross Perot said, I'm all ears.