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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: HG who wrote (6351)	3/18/1999 6:02:00 PM
From: Jenne	Read Replies (1) \| Respond to of 19700

CMGI Up On Stock Split By Eric Auchard NEW YORK (Reuters) - CMGI Inc. shares rebounded $14 Thursday after it set plans for a two-for-one stock split, and amid speculation CMGI may tone down its tactics in opposing Lycos's merger into USA Networks Inc. (Nasdaq:USAI - news) Several Wall Street analysts said they expect CMGI may proceed more carefully in its campaign to seek an alternative to the current Lycos-USA Networks traction than CMGI's recent combative stance to the deal had led many to believe. They said CMGI appears wary of wooing another bidder for Lycos ahead of a Lycos shareholder vote on the USA merger, as USA Networks could be in line for sizable options in Lycos shares if it forsakes USA Networks' deal ahead of the vote. CMGI it was up $14.12 to $189.50, after trading as high as $195.50 on the Nasdaq stock market, where it was among the most active issues. Lycos fell $3.44 to $98.31 as speculation ebbed that a higher bidder would emerge soon. ''It's not in CMGI's interest to push a deal quickly,'' said Ken Winston, an analyst at Needham & Co in Boston. ''If they bring a deal to the table now, USA gets a windfall. If they bring a deal after the vote, there's no windfall for USA.'' Internet venture firm CMGI, the largest Lycos shareholder, with an 18.5 percent stake, has said the terms of the USA deal short-change shareholders of Lycos, a popular network of Internet sites. CMGI Chief Executive David Wetherell recently resigned from the Lycos board to begin a rare public campaign to attract alternate bidders. A vote on the Lycos-USA Networks merger is not expected until June or July. Securities analysts said the existence of a USA option to receive shares if the stock rises above $127 functions as an effective cap on alternative bids ahead of the vote -- since other bidders would be reluctant to trigger the USA option. Karen Ficker, an analyst with ING Barings Furman Selz, said CMGI actions suggest it is growing confident other shareholders will support its view that the Lycos deal is unfair. ''CMGI knows they are not the exception at this point,'' she said. Ficker said frequent talks she has had with other Lycos shareholders suggest that dissatisfaction remains widespread with the current USA Networks deal at current price levels. ''CMGI is going to be much less vocal about what their intentions are,'' Ficker said. ''They doesn't need to make as much noise because they are aware that the deal won't go through, whether or not they make noise,'' she said. In February, Lycos agreed to merge with affiliates of USA in a deal then valued at $17 billion to $18 billion, forming a potential entertainment and electronic commerce powerhouse to be headed by veteran television executive Barry Diller. Under the terms of the complex deal, USA Networks would control 61.5 percent of the new company, Lycos shareholders would retain 30 percent, and USA-controlled Ticketmaster Online/CitySearch Inc. would own 8.5 percent. ''It puts a road bump in the way of someone else buying it,'' said Abi Gami, an analyst with brokerage William Blair & Co. ''Anyone who comes along, they know they are going to throw away maybe a few hundred million dollars in what are -- in effect -- walk-away fees,'' he said. A source familiar with the deal said USA Networks is in line for an option to receive 17.6 percent of Lycos should its share price recover to $127 from its current level below $100. There are no cash break-up fees involved, the source said. Spokesman for CMGI and Lycos declined to comment. USA Networks did not immediately return calls seeking comment. CMGI's stock move was in part due to the company's decision to split its stock announced late Wednesday, brokerage analyst Ficker said. Splitting the stock typically encourages smaller shareholders to buy the stock at the lower price, often driving up demand, and the price of the stock. CMGI's stock move recovered ground that the shares lost last week after the anticipated stock split failed to materialize at that time. It hit an intra-day high of $226 earlier last week, a new record level, ahead of CMGI's second quarter earnings report and amid speculation a stock split was in the offing.