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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Bucky Katt who wrote (2739)	2/3/1999 6:15:00 PM
From: Rande Is	Respond to of 57584

NTKI and CDNW: When will they announce their merger? Both companies released earnings this afternoon. This gives them a nice period to the ongoing saga that has joined their stocks at the hip. Could they surprise everyone and announce their merger this month? They estimated back in October that the merger would be completed "prior to" March 31, 1999. From CDNW report: On October 23, 1998, CDnow, Inc. (Nasdaq: CDNW) and N2K Inc. (Nasdaq: NTKI) jointly announced the signing of a definitive merger agreement. The merger is expected to be completed prior to March 31, 1999. Take a look at today's report by both companies. The increase in revs is fabulous. The decrease in losses is impressive. But remember, the WHOLE is greater than the sum of the parts. So when these two become as one, they can cut much of the fat, merge the distribution, accounting, warehousing, executive, marketing, etc. And yet, they can continue to operate both CD Now and Music Boulevard ecommerce sites to bring more revs with less expense per sale. The increase in customers to both sites and increase in revs in both companies over last year, shows the direction they seem to be headed. Between the two companies, they have marketing deals with virtually all the top web portals. Some of this overlaps, as well. The number of labels offered by each site can be increased by merging the two as well. I am quite surprised that these two have been so ignored for so long, but equally confident that upon merging will be seen in a new light by investors, as well as analysts. I think we have an opportunity here to make a position trade in both companies that will mature AFTER the merger. When merger is completed, I see analysts calculating the new valuation. I see them realizing that the number 1 and number 2 music ecommerce retailers when merged, will be so far ahead of the rest of the pack after the merger that there will be no catch-up by anyone, including AMZN. And don't forget that N2K has some other impressive divisions that are cutting edge. They are working on becoming the first choice for broadband music delivery...the technology I predict will be the next major change for music [see my thread for details "Music Internet Winners and Losers]. They also have a record company headed by legendary record producer Phil Ramone, called N2K Encoded Music. Music has a computer code embedded into the data, which identifies the owner. This solves the problem of paying the pipers for the music. [songwriters and artists] By comparison, MP3 format is mostly used by college kids who buy the latest CD then upload to the college website, so that every other college kid can download in MP3 format. Diamond Multimedia actually makes a player for such files, most of which are bootlegged. I expect this format to one day be changed to a coded stream. Anyway, NTKI has lots of things going on that are cutting edge and I am looking to increase position as time of merger comes closer. Tonight on CNBC is a profile on CDNW. Perhaps we will get a better picture of the whole of things there. But meanwhile, take a look at the earnings reports of both companies. I sure liked what I saw. . . nothing like AMZN. . . . BETTER. Rande Is