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Technology Stocks : General Instrument Corp.'98 (GIC) -- Ignore unavailable to you. Want to Upgrade?

To: John F. Dowd who wrote (365)	7/28/1998 10:37:00 AM
From: KM	Read Replies (2) \| Respond to of 615

I just bought this stock this morning. FYI, from Herb Greenberg's column today: General Instrument inklings: An item here last month about possible winners in the AT&T (T:NYSE)/TCI (TCOMA:Nasdaq) deal mentioned General Instrument (GIC:NYSE). TCI is the biggest customer of its set-top boxes. The key to the story was that General Instrument owns 80% of Next Level Communications, which, in essence, provides the same digital box technology to the Baby Bells that GI provides to cable operators. Why mention again? Late last week Next Level announced yet a new deal with U S West (USW:NYSE). (One wired source says another with GTE (GTE:NYSE) should be coming at some point.) The most recent deal prompted Merrill Lynch's Joe Bellace and Warburg Dillon Read's Nikos Theodosopoulos, sounding very much like they'd like to be co-bankers on the Next Level spinoff that GI has mentioned, to issue extremely bullish GI reports. So bullish, in fact, that Bellace predicted that this one agreement should bring Next Level as much business next year (roughly $75 million) as it did in all of last year. Theodosopoulos added that with the new contracts Next Level will compete head-on with the likes of Advanced Fibre (AFCI:Nasdaq) and Reltec (RLT:NYSE); both sport market values of around $2 billion. If you're into extrapolating, and figure that Next Level could get a comparable value as Advanced Fibre and Reltec, one longtime GI investor says you might figure that GI's 80% Next Level stake is worth $9 per share, in the form of a stock dividend, to GI investors. That assumes that GI goes ahead with plans, long forgotten on Wall Street, to spin off Next Level, in a tax-free transaction by early next year. GI reports earnings later today, and meets with analysts in New York on Thursday. Don't be surprised if this subject comes up.