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Technology Stocks : VIAB (Viacom Class B shares) formerly CBS -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (2558)	9/18/1998 9:19:00 PM
From: John M Connolly	Respond to of 4613

Hi Larry ; In that recent Business week article they gave somebody's valuation of the radio assets at $25 a share - now that times 700 M shares is$17.5B . The reason for this IPO is that CBS feels that the company is under valued and feels that the market cap of $20B is way too low. Even though " value is what another person is prepared to pay " - management is citing the other radio companies, which if my memory serves me are trading with a P/E in excess of 30. The reason I think that the P/E can be used is because if we know the earnings times the P/E number - we have the marketcap. I agree that this will be very positive for the shares - it is my opinion that management sees the share price after the IPO - as equivelent to the mid 40's for todays shares. That would be a marketcap of about $31B I think. John

To: Larry S. who wrote (2558)	9/18/1998 9:47:00 PM
From: MGV	Read Replies (2) \| Respond to of 4613

Larry, A Warburg Dillon analyst assigned a value of $25 Billion to CBS' radio assets in a Business Week article last month. The projection is based on either comparative cash flow or revenue multiples. Compare CBS to 3 other radio/outdoor advertising competitors. Until AMFM's recent transaction of more radio assets, CBS had the undisputed largest radio business. The numbers provided below for CBS are for the entire company. I haven't calculated the relevant numbers for just the radio assets but they are much lower multiples (i.e. network and to lesser extent affiliate business distorts to the downside the value multiples), meaning CBS is even more undervalued than the comparisons below suggest. I think the market cap of CBS should be closer to $35 Billion on cash flow basis and that the radio assets are worth what CBS is worth today ($20-21 Billion. If I'm right (less than Warburg Dillon estimates) 20% of that would be $8-8 1/2 Billion. Pay down 2.5B in debt and use the rest for buy backs and acquistions. Symbol Company Name Price/Sales Ratio Price/Cash Flow Ratio CCU Clear Channel 11.01 39.7 AMFM Chancellor 4.65 26.3 JCOR Jacor 3.9 23.8 CBS CBS 3.31 16.7 In sum, Karmazin and Jordan believe the market is not assigning appropriate value to CBS today. They figured that the industrial assets were hiding value and they were right but there are still significant hidden asset values in CBS. That is why I own it.