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Technology Stocks : The Learning Company (TLC) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas C. Donald who wrote (6092)	11/20/1998 9:35:00 AM
From: Trader Dave	Read Replies (1) \| Respond to of 6318

Quick thoughts: 1) Good news because it is a non-entity from a US consumer marketing perspective. 2) Cendant share loss likely to continue for some time as the company digests the acquisition. 3) Cendant development plans have been constrained to try to maximize profitability in the short term. Their product releases will be tragic in comparison to the 100 new titles TLC plans to launch in 1999. 4) It makes TLC the much stronger player from a joint venture and startegic partnership perspective. Any owners of major branded content that wants an interactive venue will likely seek out TLC now. 5) Valuation of 2 times trailing revenues looks fair enough for a second tier share losing and weakening competitor. (In addition, valuations for volatile games businesses are much lower.) 6) Since the buyer is likely to have much more of a profit motivation, it is likely that we will see "adult supervision" from a business perspective

To: Thomas C. Donald who wrote (6092)	11/23/1998 3:02:00 PM
From: Trader Dave	Read Replies (1) \| Respond to of 6318

Tom, I'm sure you saw that Rugrats was the number one box office title over the weekend. Did you know that Nickelodeon has co-sponsored a Kiosk with Rugrats software in over 2000 theaters? It appears that business is strong across the entire product line and now the low cost PCs are starting to fly off the shelves. There is a problem, apparently there are more fund managers calling and demanding time with management than ever before. However, management has had to push off the meetings for the last several weeks since so many things are in the works. With the purchase of cedant by a foreign company, TLC has become the defacto partner of choice for high profile partnerships. In addition, one key element of the cendant sell out is a $185 million earn out based on the division's PROFITABILITY. This is great news since it will almost eliminate the risk of aggressive couponing for market share. Over the last year, TLC was able to generate significant operating profits while cendant did not. I'm sure the business environment for TLC will improve further with cendant forced to focus on the bottom line. TD (P.S. It's nice to see new recent highs on high volume.)