Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: dougjn who wrote (2735)	6/24/1998 4:30:00 PM
From: MGV	Read Replies (1) \| Respond to of 11568

Doug, (You said: AT&T's Teleport acquisition addresses this same market (a little). It's TCOMA buy announced today, while interesting for other reasons, does not.) Teleport, as you note, targets the business (higher margin, more sedentary) end of the voice-data-image market. Certainly TCI does not dp that. Nonetheless, strategically, doesnt TCI's cable give AT&T an opportunity to offer something closer to one stop shopping to business customers by giving T more of its own local capacity? And what about the data transmission opportunity with the cable? Does this solve to some extent T's data transmission capacity appetite? How much of this buy is a bet on the continuing convergence of PCs and TVs? If this is a driver of the deal, how much of the convergence is relevant to the business segment of the market. What kind of international penetration does TCI have, if any? This deal fills the plate for a discussion on strategy, don't you think so? - Mark

To: dougjn who wrote (2735)	6/24/1998 8:12:00 PM
From: Sonki	Read Replies (2) \| Respond to of 11568

doug, what is ur opinon of T as a long term investment? thx. spare change to put into wcom/ or t? AT&T (T) 60 5/8 -4 3/4: Desperate companies take desperate measures. When asked why T acted now to acquire Telecommunnications Inc (TCOMA), C. Michael Armstrong noted that "time is against us." With growth expected to slow in its long-distance business (due to increased competition from RBOCs), T was desperately seeking a way to break into the local phone market. In acquiring TCI it did just that. But in Briefing's opinion, T paid a steep price ($48 bln) for such access. Desperation/fear can do that. Synergies aside (every deal is filled with promises of future synergies which will save the combined entity huge sums), the bottom line is AT&T paid more than 6x revenues for TCI and its 22 million cable users. Earlier this year, SBC paid 4.2x revenues for Ameritech and its 21 mln phone lines. A little less than a year ago, Bell Atlantic bought NYNEX and its 19 mln lines for nearly 2x revenues. While TCI's projected long-term growth rate exceeds those accorded NYNEX and Ameritech at the time those deals closed, is it really worth 3x NYNEX or 1.4x Ameritech? In our view, T overpaid out of fear that if it didn't strike now there wouldn't be any quality companies left to buy. When was the last time you made a good decision acting out of fear? Other concerns: the combined entity will create a bureaucratic behemoth of nearly 160,000 employees; T has little experience in the cable industry; and T will have to spend a bundle over the next few years upgrading the cable infrastructure before it realizes its goal of being a "one-stop shop" for telephone, cable TV and Internet access.