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Technology Stocks : Broadcast.com (Acquired by Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: Derrick P. who wrote (1091)	4/1/1999 12:14:00 AM
From: George Martin	Read Replies (2) \| Respond to of 1260

Hi, Derrick Just wanted to offer a little different viewpoint to your comments and reaction to the merger. Before that, would like to THANK the many regular contributors to this thread, and BAM in particular, for very helpful and insightful commentary. I've had the benefit of being a regular reader but not regular contributor to this thread. As BAM pointed out in detail in yesterday's posts, there is no absolute buyout price per se, but a stock conversion ratio -- in this case apparently between .75 and .80. FWIW, my own guess is .78. The key thing in determining the ultimate conversion or cashout value obviously will depend on what happens to the YHOO share price. (Full disclosure YHOO is my 3 rd largest holding after CMGi and AOL. Ratio of YHOO to BCST shares for me 3:2). If the market reaction is quite positive based on perception of strong strategic value, AND reasonable terms, the conversion value will obviously continue to increase. If cash was the "currency", obviously a higher immediate "price" would be more desirable. As an example the recent AOL-NSCP merger when announced had only a modest premium for NSCP with a .43 conversion ratio. The estimated 4 +billion buyout reached an conversion value of 8 + billion by the time the merger closed approx. 5 months later when the NSCP shares more than doubled. IMHO same thing could happen here with what seems to an excellent strategic fit. Based on the strategic value of this fit, would not be surprised to see some analysts increase 12 month YHOO price targets, etc. Another factor to watch -- as BAM has repeatedly pointed out -- there will continue to be an opportunity to accumulate more YHOO at a discount up to the time of the merger conclusion. In the case of AOL -NSCP that discount was a somewhat modest 6 - 8 % and obviously declines as merger date approaches. In the case of ATHM - XCIT (conversion 1.03), in the early stages that gap or discount was sometimes quite high, at times more than 15 %. At the time it was a great opportunity to accumulate ATHM. Gap has now decreased substantially and XCIT share price is now up 65 - 70 % from the time of the announcement. This just another factor to keep in mind, if you are LT investor. From the LONG-TERM perspective, I really believe a buyout with a modest premium that is perceived to be of key strategic value, will provide the biggest conversion value. With Yahoo further bolstering its premier portal position -- and raising the bar to competitors for content aggregation -- I think we should expect a very positive market response. Obviously, trading interests with short-term takeover premiums in mind would have quite a different opinion. Also, another reminder: what happened here with BCST is actually identical to what happened with GCTY which popped from the 70's to the 115 range the day the takeover was announced. Same thing happened here except the pop from the 80's to the 110+ area occurred when the RUMOR came out, not the actual announcement ! 2 more related points IMO: Seems to me BCST needed to partner up in this phase of rapidly increasing consolidation phase. Seems this critical streaming media area / broadband will explode and see more potential competition as well: e.g., Magnitude Network being developed by CMGI. Finally, regarding comments about AOL link-up with streaming media enterprise. Steve Harmon and others have commented that AOL - RNWK would be a good fit. I hope so, too, as I hold a similar position in RNWK that I had in BCST. AOL Instant Messenger is now configured to incorporate Real Player -- if that's a harbinger of more collaboration to come. Here's hoping we'll see an announcement coming from AOL sometime soon, too ! Would welcome any different viewpoints Thanks again to all regular posters and good luck George Martin