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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Teflon who wrote (2330)	5/30/1999 12:18:00 PM
From: NY Stew	Respond to of 54805

Teflon, 1) What you think the price outlook of the stock is over the next two months? If I expressed a short term view the market would surely prove me wrong so I defer answering for two months. The WebTV Developers Conference is being held June 6-9 so I expect news this week. After the market closed on Friday it was reported that both the Classic and Plus versions will incorporate Gemstar's technology. It is likely that we see MS lock up as much market as possible with various promotions before AOL TV is launched. I would not be surprised to see the box given away with a 2-3 year subscription requirement. EchoStar and MS are slashing $300 off the DishPlayer price and will initially offer it at $199. 2) What are the chances of a settlement in the lawsuit? Much better than that of the Yankees winning the World Series again. 3) What are the chances of AT&T striking an agreement with GMST regarding the use of their interface? And if this does happen, how would this product be different than the Excite@Home portal/GUI that is certainly going to be perpetuated within AT&T's systems? Same answer as above. You will see TV GUIDE as the interface. What percentage of subscription fees and recurring revenues that Henry can negotiate is the only material question. I agree with Joe Arsenio in his most recent report and see the AOL agreement as a model. 4) Through my discussions I have sensed a large community of institutional players that consider GMST to be a "legal play". In other words, a bet on the outcome of its lawsuit with TVGuide. What are your thoughts on this and what other material items in GMST's near future do you see driving this stock forward? I disagree. After signing exclusive worldwide agreements with Microsoft and AOL and the many agreements with CE OEMs and others, I believe that the Gemstar story is now independent of the US cable market which is just 10% of the global market. Gemstar is forging ahead in the next two largest markets, Japan and Germany. Gemstar's market is 600 million households worldwide. It's technology is soon to be or currently within G Guide (in Asia) Guide Plus+, StarSight, WebTV, Windows (Win98 and on) and AOL TV. I might add that it is my belief that it is also within TV Guide but that is for the courts to determine. The technology is both enabling and application in nature. MS and AOL have licensed the enabling technologies and have or will design their own applications. Guide Plus+, StarSight and G Guide are true hybrids. This is where Mike's thinking has helped much and I hope he expands on it here. The answer to your last question is the obvious one, execution. Look at the partners of Gemstar and at the distribution channels. Look at the joint ventures just getting off the ground. I have never come across a formula quite like this one ... but then again I have also been fooled before. Regards Stew