For those bullish on ELNK some interesting reading.. rumors from streetq, reiterated buys,, and post from spencer at raging bull..
j
To: +PeterR1700 (808 )
From: +judge
Thursday, Feb 4 1999 1:29AM ET
Reply # of 809
Here is some interesting reading for ELNK shareholders.. and earnings whispers.. j
earningswhispers.com
By: RSpencer
Reply To: None
Wednesday, 3 Feb 1999 at 7:19 PM EST
Post # of 199
Rumors percolating from the underground
like there wasn't enough to read here over the last couple of days those of you who
needed
encouragement are about to get it. If you were wondering why ELNK rose today on no
news after
a fairly horizontal week, the following is why but remember this is rumor only taken from
one of the
nets gossip mongering kingpins.
Posted 2/3/99
Sprint-Earthlink-MindSpring: Rumors Galore
StreetQ has heard rumors that Sprint is trying to form a joint partnership venture with
Earthlink
(ELNK) and MindSpring (MSPG) and take a 28% stake in the enterprise. Sprint recently
sold it's
dial-up subscriber base to ELNK and it may be trying to consolidate the ISP landscape
through
ELNK.
In other news, StreetQ has heard that Earthlink will report a 40 to 50% increase in
subscribers to
their service over the holidays and that it will beat Street expectations on earnings when it
reports
on February 16, 1999.
well an end run by Sprint to acquire MSPG and then fuse it into ELNK was something I
never
considered before so thats a pretty interesting slant.
the second "rumor" is pretty much just straightforward deduction, but it should hlep the
stock
move.
lastly some people are rumoring that MSFT is in talks with Lycos & as you should know
by now,
Lycos is the search engine of ELNK's start up personal pages
uh I guess you could say my comments regarding "overripe" and fertile aren't completly in
my
imagination (of course these guys, Sprint and MSPG could be in on the scientology shill
plot too)
meantime,things might get pretty interesting for awhile
BoardMark
MemberMark
Ignore P
More thickening agents /analysts "buys"
for those that missed it:
EARTHLINK NETWORK RATED NEW 'BUY AT WASSERSTEIN PERELLA
Princeton,New
Jersey,Jan29 (Bloomberg Data)--Earthlink Network Inc.(ELNK US)was rated "buy" in
new
coverage by analyst William B. Klein at Wasserstein Perella Securities. 12-month target
price is
$110.00 per share
14:46:29 01/29/1999
EARTHLINK NETWORK REITERATED 'BUY' AT CRUTTENDEN ROTH
Princeton,New Jersey,
Jan. 29 (Bloomberg Data)--Earthlink Network Inc. (ELNK US) was reiterated "buy" by
analyst
Glenn T. Powers at Cruttenden Roth. 13:32:44 01/29/1999
Elnk & MSN and/or other possiblities PART1
Let me state for those that think I am too "pro elnk', the following is all one man's opinion
only from
what I have gleaned through various readings. So far my email has only included thank
yous so I
don't really feel much need to apologize for anything. I speculate on where ELNK may be
going
just as any other investor would, I have no inside dope other than that and my own
experience as
a daily subscriber to their service. The following is an answer to post 181. I welcome
supporting or
refuting facts.
There has been ongoing speculation about an alliance of somekind between msn and elnk
for at
least 6 months. I believe this was mostly based on a simple projection of future industry
consolidation, which most everyone agrees is inevitable and who has the most $, will and
the
most to gain. The trick of course is figuring out, who, when and at what price. The
msft/elnk
speculation increased when people realized that the Thanksgiving rumor (which fueled a
20 point
pre-market rise in the stock) of an imminent Sprint buyout was not going to happen and
everyone
subsequently started looking around to see who might have the muscle to outbid Sprint, if
Sprint
failed to accelerate their own agreement. The AOL-Netscape merger reheated the same
speculation as did the recent SPO which supposedly multiplies a pretty large war chest.
All in all it
is a pretty ripe, if not overripe situation. Add to the mix that despite numerous earlier hints
of
profitability by first quarter of 99, Elnk recently stated that they no longer expect
profitability until
after 1999 and it is impossible to wonder why without thinking of acquisitions, since they
were
already hovering near break even, and revenues from an increasing subscriber base and
income
producing alliances continue to grow as subscriber growth even “outpaces” the companies
own
optimistic projections.
ELNK's headquarters is not far from where I live and everything I have heard both locally
and on
the net suggests they are doing a lot of hiring. They are also in the throes of expanding
facilities for
new services. New Christmas computers etc. accelerated the above mentioned
“outpacing” even
farther. This current wave of new subs results from the numerous, “first month free”
offers they
have introduced, including converts from AOL, Sprint subscribers, selected radio station
“listeners”, bank tie-ins (supposedly inserts to Wells Fargo account holders), CompUSA
customers, Hewlitt-Packard, IBM and iMac buyers so keep in mind that regardless of this
month's
earning report, figures for this new bulge of customers won't even show up until Spring.
Even
deducting for expansion and employees all of this indicates extended gearing up and an
excess of
income so this is a company that is anything but cash poor.
Where the speculation was once that Bill & MSFT might be looking to acquire an ISP
such as
ELNK to counter AOL, ironically the same speculation exists now, but in reverse. I am
not too
clear on how any of this would eventually form but I think any kind of an alliance would
help both. At
one point MSFT was reportedly looking to unload MSN into AT&T but those negotiations
went
south. Meantime AtHome & Mindspring went shopping gaining both size and stock
appreciation
rapidly. Traders turned to ELNK for their response and the stock shot up in anticipation of
such an
acquisition. There were fantasies of an ELNK/MSPG merger but though that may be an
investor's
wet dream, I would rate its chances between nil and unlikely. The two companies are
near
opposites in philosophy and in my mind ELNK would gain little other than subscribers,
debt and
integration headaches. I think that ELNK management feels very confident about their
ability to
garner increasing subscribers on their own, so in my mind they will eschew smaller isp's,
and
horizontal moves like MSPG etc in favor of something that helps them vertically. This
could include
an ISP if it was somehow unique e.g. high speed, satellite, wireless or possibly well laid
out for
inroads overseas, etc. That is they would be far better served to acquire something that
they
cannot internally generate,...
ELNK & MSN and/or others Part 2
...(they would be far better served to acquire something that they cannot internally
generate,)
which in my mind could lead us back to MSN. Whether they could actually afford such an
alliance,
I don't know. Putting aside, the immediate doubling of subscriber base and and other not
so
“minor” arrangements as structure and cost, ELNK would gain immediate name
recognition,
power and proximity to the web's only major browser not controlled by AOL. All in all,
100 times
more useful than buying a third tier portal or regional ISP. If it became a partnering of
sorts as
opposed to an outright acquisition MSFT would gain efficiency, effective strategy and an
increased
base by which to battle Netscape which is something I am sure Bill hungers for, despite
anything
said in court or elsewhere. Though MSFT has global gorilla stature and Explorer, up till
now their
success as an ISP and dominating net force has been relatively underwhelming.
I follow issues and developments more than crunching numbers so all of this is just nothing
more
than my own opinion, but I welcome anybody with more ability than me to figure out how
financially
probable all of the above would be.
Despite whether all of this leads to something with MSN, I think it is fairly safe to assume
that
ELNK is warming up to acquire something. They reportedly entered discussions or put in
bids for
a couple of entities all ready though they did not come to fruition. Supposedly Netcom was
one of
these and since I feel that this deal may hurt MSPG in the long run more than help I am
not
particularly sad that ELNK eventually passed on it. Meantime the recent buy
recommendation for
ELNK from Wasserstein Perella issued 1/29 is supposedly (I don't follow them) from a
firm that
has been relatively luke warm regarding net stocks, but who also specializes in buyout
speculation.
Even by conservative standards it adds up to pretty fertile grounds for an aquistion of
some type.
First and foremost my interest is in making money via stock appreciation so personally I
would not
buy a stock based on this kind of scotch taped rumoring if that was all there was to them
since I
have seen too many instances of vaporization. Luckily in the case of ELNK if all of the
above turns
into smoke I believe ELNK will still increase in value. Despite their denials, I think they
are in
position to show a profit anytime they wish to structure it as so while overall value is
destined to
increase in accordance with ongoing appreciation of customer base, increasing
advertising/alliance revenues, increasing likelihood and date of their own acquisition by
Sprint, a
continuing pattern of beating expectations, as well as quick, substantial runups when they
roll out
expanded high speed access and possible stock splits. Aside from direct clairvoyance I'm
not
sure how many more assurances any investor could want.
RSpencer |
