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Strategies & Market Trends : Due Diligence - How to Investigate a Stock -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (244)	4/25/1999 1:47:00 AM
From: Nazbuster	Read Replies (1) \| Respond to of 752

RRRR - Below is news from Thursday. This is starting to look more and more like a P&D... Don't you find it odd that the terms of the $75M deal were not disclosed? Now there is an "acquisition" with terms not disclosed, and the deal is for a non-revenue producing concern. ... a plan to build an array of free* e-services for Web masters, consumers and corporations...* In addition, I thought the $75M was a letter of intent, not yet an investment, yet the article implies the $75M was used for the acquisition. Then there are the auditors statement of concern for their survival and a history of massive losses. This is an odd position to take given they can't get their core business to be profitable: (We) plan to acquire other complementary sites and services to roll into LiveUniverse, as well as creating or acquiring other platforms for investing in and incubating other great Internet ideas. I guess, if you're losing lots of money, spend it faster and maybe you can make it up with volume! They have a strong management group, and with 200 employees, they should be generating tons of cash. They aren't. Why? Something smells fishy... Disclosure: I'm short RRRR, but still unclear about the "floorless" issues. From Yahoo news: Thursday April 22, 9:07 pm Eastern Time Rare Medium buys community network NEW YORK, April 22 (Reuters) - Internet solutions firm Rare Medium Group Inc., on Thursday said it acquired community and entertainment network LiveUniverse.com as part of a plan to build an array of free e-services for Web masters, consumers and corporations. Terms of the transaction were not available, but it is the first deal for Rare Medium since it received an infusion of $75 million from investment firm Apollo Management last week. Rare Medium is trying to transform its current status as an Internet service provider to a one-stop provider of venture capital, Internet software and professional services. Its shares were up 25 percent, or $3, at $15 as one of the top percentage gainers in active Nasdaq trading Thursday afternoon, reaching a new year-high. ''This acquisition is just the beginning,'' said Glenn Meyers, chairman, president and chief executive officer. ''(We) plan to acquire other complementary sites and services to roll into LiveUniverse, as well as creating or acquiring other platforms for investing in and incubating other great Internet ideas.''