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Technology Stocks : Internet Guru Discussion -- Ignore unavailable to you. Want to Upgrade?

To: P.E. Allen who wrote (900)	4/5/1999 4:01:00 PM
From: Panita	Respond to of 4337

XCIT and ATHM. Interesting ATHM down while XCIT up. Looks like the merger is near. What do you think Steve?

To: P.E. Allen who wrote (900)	4/5/1999 4:36:00 PM
From: Roader	Respond to of 4337

I have been touting the hidden interent value in The Sabre Group for a while (ticker TSG) but no one seemed to listen. Today's price makes it clear that someone has found it. Today's movement is the beginning of a triple bagger: Take a look Sabre may be eyeing IPO for Travelocity By Bloomberg News Special to CNET News.com April 1, 1999, 2:40 p.m. PT FORT WORTH, Texas--Sabre may find the lure of an Internet stock offering hard to resist. The company, which runs the world's largest computerized reservation system for travel agents, also owns Travelocity, among the biggest online airline booking services on the Net. Sabre president Michael Durham says Travelocity is an important contributor to Sabre's reservation business. That contribution is coming under greater scrutiny, though, after rival Internet travel service Priceline's shares soared more than fivefold since going public Tuesday. "If you have a successful Internet company, given today's values, you're a fool if you don't consider alternative ownership structures," said Samuel Buttrick, an airline analyst at PaineWebber. Almost 83 percent of Fort Worth, Texas-based Sabre's shares are held by its former parent company, AMR, which also owns American Airlines, the second-biggest U.S. air carrier. Travelocity's $285 million in 1998 revenue was about eight times Priceline's. Based on Priceline's newly found market value of $11.5 billion, Buttrick estimates Travelocity's is worth at least $5 billion. "Whatever the value is, it's most certainly not reflected in the value of Sabre," he said. Each $1 billion in Travelocity's value would contribute about 7.5 points to Sabre's stock price, he estimates. The rise in Sabre would increase AMR's value as well, he said. The focus on Travelocity comes a week after Sabre unveiled a restructuring that combined its travel reservation and computer services division, yet kept Travelocity a separate unit. "Travelocity is at a different stage of development than our other businesses," Durham said. "We felt that a more separate organizational structure would be more advantageous." Several analysts and investors, though, said the new structure appears to prepare Travelocity for a spinoff. The surge in Priceline's shares and the rise of other Internet ticket sites such as Cheap Tickets, which has a market value of about $668 million after going public two weeks ago, may create a new problem for Sabre. "Those two now have a lot more cash than I think Sabre would be willing to lose on Travelocity," said Nicholas Moore, senior technology analyst for Jurika & Voyles in Oakland, California, which owns about 6 percent of Sabre's common stock. To compete with those sites, as well as other outlets such as Microsoft's Expedia, Sabre will have to spend aggressively on Travelocity, which could undermine the performance of its other businesses, Moore said. "It may be called upon to have accelerated losses in the name of accelerated revenue growth," Moore said. "It's either not going to get the resources it needs or it's going to destroy the rest of Sabre." Copyright 1999, Bloomberg L.P. All Rights Reserved