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Technology Stocks : AT&T -- Ignore unavailable to you. Want to Upgrade?

To: Walter Xie who wrote (2466)	5/27/1999 8:22:00 PM
From: Mark Oliver	Read Replies (1) \| Respond to of 4298

Whether to buy T or UMG depends on your goals. If you are looking for a long term trade, certainly buying a tracking stock at a discount seems wise. Short term trading, I find tracking stocks tend to lag the movement of the acquiring stock and that seems to make the acquiring stock a better buy for quick trading. The spread seems to settle at a percentage and doesn't seem to change much until the final days before the transaction is completed. If you are simply playing arbitrage, that's again another story and it's one of patience and often includes boxing your position from the very start. Personally, I like T as an investment both long and short. On the short term, less than 6 months, I think the market doesn't understand what T is doing. Also, some people are saying they are planning on technology that doesn't exist, which throws risk into a traditionally blue chip investment. I believe T is making good moves into uncharted areas. They are building an empire of full service communications/internet/e-commerce/entertainment that has never been tried before. It's bold and visionary. I've followed the deployment of cable equipment for several years now and I'd say this is the best time ever to roll out infrastructure on equipment that has become more affordable and is well tested. I believe their plan can work and more important, I believe the market will slowly come around to my thinking which will make T a much more valuable investment. People look at the price per household that T is paying for UMG and think it's crazy. Well, it is high, but maybe the UMG network is a little farther along the upgrade path than TCI. Also, they got TCI for a better price because it was the first deal of it's kind. Don't forget, they also won Comcast in the UMG deal for selling telephone services. I also believe the package of services that will soon be available will win back a large portion of households that were lost to satellite TV. Also, high-speed Internet excess will be very appealing to the SOHO customer which will again broaden the potential market that they can sell to. In general, what T is doing is so exciting and far-reaching the market will have a very difficult time putting a real value on this for many years to come. Naturally, bringing all of these services companies together into one cohesive unit will be a giant task. There is room for doubt on whether they can execute or not, and we won't know this for several years. <Because I bought T after the proposed deal. If I bought UMG instead, I would have been in the water by now. Did you suggest me to sell T and buy UMG now? Thanks.> In the end, I would suggest patience. I believe you don't need to take a loss at these levels. You may not see great gains and you might even see your investment trading underwater for awhile, but I believe patience will be rewarded. Regards, Mark