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

To: Charles T. Russell who wrote (21)	1/19/1999 9:41:00 PM
From: Charliss	Read Replies (1) \| Respond to of 68

Charles, Seeing that I had an interest in MMTM- that is, looking it over as a possible investor- my partner also looked into it at my request. He came up with what could be seen as some provocative questions- not to suggest that there is anything fundamentally wrong with the deal, nor as a way to discourage my entry- that he thought I might like to forward to the thread. Thanks, Charliss Here they are: Points to ponder about Momentum.... What is the proposed line of business? The Lehman Bros analyst seems to think that they are about to open some sort of e-commerce one-stop-shop for HR benefit services. OTOH, the SEC Form 10 says nothing of the sort. The business areas envisioned by that registration document are: 1 - "E-commerce products", probably as front-end products to enable PSFT integrators to "easily" plug a store-front into an ERP installation. 2 - "Analytic application products", i.e. data warehousing, probably as add-ons to plug into the side of the PSFT ERP installation. And BTW, will PSFT's newest product, "PeopleSoft Enterprise Performance Management (EPM)", be contributed to the Momentum portfolio, or will it directly compete with anything that Momentum does in this area? 3 - "Industry-Specific Application Products" - IOW, Vertical Market packages based on the PSFT platform. Not a bad thing, but won't this compete directly with the PSFT system integrators? The second point to ponder is valuation. Looking at page 35 of the Form 10, we find the "Purchase Option", a share re-purchase agreement strikingly similar to the typical re-purchase agreement used by closely held corporations. PSFT can buy back at pre-determined prices until 12/31/2002 - don't look for any takeover before then... And look closely at this agreement to find the real upper limit on share price - it looks to me like about $67 at the open, and rapidly diminishing as PSFT charges development costs to MMTM, with a lower limit of $3.... Finally, from a purely perceptional point of view....doesn't this feel like something that CA would do? (Well, kind of the inverse of CA's usual deal, but perhaps-maybe- just as self-serving IMHO.) Charliss' partner James.