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To: lazarre who wrote (46)	6/6/1999 6:11:00 PM
From: Glenn Petersen	Respond to of 963

A few additional thoughts on PRGY. According to their recent press release, they will not close their Cable & Wireless transaction until the fourth quarter. Since PRGY is sitting on over $150.0 MM in cash, the deal will not be dilutive. If we adjust the PRGY subscriber numbers to assume that PRGY retains 125,000 of the Cable & Wireless subscribers, and that the revenue generated from these new subscribers will be comparable to the revenue currently being generated from the PRGY subscriber base, then PRGY is selling at 11.71 times recurring revenues and each of its subscribers is being valued at $2,230 each. This is at the high end of the range for the national ISPs. Of course, you need to factor in that PRGY is managing 150,000 subscribers for Telmex and that there is a bit of a buzz currently surrounding PRGY because of their announced intention of targeting the Hispanic community. On the downside, they are still carrying baggage from Prodigy Classic and they need to show some definitive proof that their new focus is producing positive results. My guess is that PRGY tracks the other national ISPs, but does not necessarily outperform them. JMHO.