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Technology Stocks : ALU - Allou Health & Beauty: Another Web Play -- Ignore unavailable to you. Want to Upgrade?

To: Timoteo who wrote (315)	4/24/1999 12:07:00 AM
From: Richard Karpel	Read Replies (1) \| Respond to of 418

Timoteo, with all due respect, I think you're missing the big picture: The Internet is going to wash over us like a tidal wave, and it will leave no business untouched. In fact, distribution will be one of the first businesses that will be impacted. Without question, the Internet is going to make the middleman a thing of the past; it's only a matter ot time. So all of your talk about cash and book value is irrelevant to me. Without the Fragrance Counter, Allou is a dying business. That's why the market has assigned the stock such anemic multiples, and it's what the market was telling you today. After having had some more time to think about this deal, and to read the company's public statements a little closer, I can now envision a certain scenario under which Allou-the-stock would still retain some value. However, first I need to determine how much equity in the Fragrance Counter the company retained. And I must say, even if my rosy scenario turns out to be true, the way the company handled this announcement was UNCONSCIONABLE. They issued a press release that didn't sufficiently describe the terms of the deal and then they were unavailable to answer questions from the press (from Reuters: "[Allou] did not elaborate on the rest of the funds, and company officials did not immediately return phone calls seeking clarification. Allou did not say how much of the subsidiary was sold."). What are they hiding? Their actions were either dishonest or incompetent, and they constituted a major disservice to shareholders. By the way, I'm not sure what your "passbook savings account" comment was about, but when a company sells an asset, management has a fiduciary duty to shareholders to maximize the value of the sale. For instance, they would be breaching that duty if they were to sell an asset to a group of friends and business associates without first determining whether a better deal was available.