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Mix-Ansicht- Terra Lycos: Die Ratten verlassen das sinkende Schiff - Rumpelstilzchen, 19.11.2000, 12:44
Terra Lycos: Die Ratten verlassen das sinkende Schiff
Ist es schon Betrug oder ist es einfach nur eine legale Schweinerei wenn der CEO eines Unternehmes seine Aktien zum Kauf empfiehlt und gleichzeitig 55% seiner eigenen Aktien verkauft?
Hier der Originalartikel:
Terra Lycos Down, Down, Down -- Nov 17 2000
by Dan Dorfman
NEW YORK (JAGfn.com)--When a company's chief executive tells you how good things are and then tries to unload 55% of his stock holdings, you've got to wonder what's going on and maybe begin to worry.
I'm referring to Bob Davis, CEO of Terra Lycos (TRLY), a leading portal and the world's third-largest ISP and wireless service provider.
In late October, Davis, despite his enthusiasm, filed to sell over 3.4 million shares of the company's stock, which is more than he sold from 1995 through 1999 combined.
Davis, by the way, was not the only Terra Lycos insider who wanted to cash in his chips. He was joined at the time by three other insiders who, in total, filed to sell a shade under five million shares of their company's stock. Included was CFO Edward Philip, who sought to sell 1,075,000 shares, or 20% of his holdings.
Interestingly, the insiders filed to sell their shares at between $20 and $23.39 a share, even though the stock was way off its 52-week high of 145 1/4.
The stock is currently trading at a new 52-week low of 15 3/8, down 3 1/16 or nearly 17%.
Figure an average selling price of about $22 a share and the four insiders, thanks to their recent sales, saved themselves about $30 million.
All these insider filings came on the heels of the Oct. 27 merger of Lycos and Terra Networks S.A., which was generally greeted positively by the Wall Street community in that the combination created a giant global Internet network operating in 40 countries in 19 languages and reaching 91 million visitors a month worldwide.
Indicative of Wall Street's favorable reaction to the deal, although the stock is down since it was first announced May 27, is how it rates the Terra Lycos' shares.
Of 11 brokerages offering ratings, eight are on the"buy" side and there are three"holds". There are no"sells".
Recently, ABN AMRO upgraded the stock to a"buy." Likewise, three other firms--Morgan Stanley Dean Witter (MSDW), Credit Suisse First Boston and Goldman Sachs (GS)--recently initiated coverage and rated the stock either a"buy" or"outperformer".
Some Street pros have expressed concern over the possible loss of advertising revenues on portals that might lead to a rating downgrade.
But Davis, in a recent interview, said he saw no hint of a downgrade and noted that the company was in good shape.
Further, he pointed to"fundamental" financial strength, notably nearly $3 billion in cash and strong revenue growth.
Davis called the merged company's business model sound and sees its advertising revenues rising to nearly $900 million in 2001, up about 80% from 2000. He predicted the joint company will beat many EBITDA forecasts (that's earnings before interest, taxes, depreciation and amortization) and break even in the fourth quarter of next year, a year ahead of forecasts.
So why all the selling, which is hardly a vote of confidence in the company's future?
A spokeswoman explained that this was the first opportunity the insiders had to sell, given the ongoing merger talks. However, she never did explain why the insiders sold so much of their holdings.
Some Street pros think that the massive insider sales may well reflect insider worries over the very reasons that may have helped lead to the stock's sharp decline.
--Widespread investor disenchantment with Internet stocks
--The trend toward shifting advertising revenues from portals to specialized sites. This trend could be especially damaging to Terra Lycos, which generates about 65% of its income from advertising.
In view of the recently completed merger, the latest Terra Lycos short interest (a bet the stock price will fall) is not readily available. But I'm told short sellers continue to be active on this one, even at its current sharply reduced price, on the theory that even lower prices lie ahead.
One money manager who has made a bundle on the Internet short side, sees Terra Lycos headed into the single-digit territory over the next three to six months, and probably sooner than later.
"The stock trend looks awful and earnings downgrades are practically a certainty," he says.
Ratten sind halt schlaue Tierchen.
Grüße
R.
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