posted 12-14-2000 02:07 PM         

AT&T's voice, data and telecommunications services are currently at "fire sale" prices. Microsoft could view AT&T's strong internet service, broadband, cable modem business and 80 million customers as a startegic no brainer. Why a no brainer? This is a no brainer because: Microsoft is the worlds cutting edge technology company and is the one with the clout to get the deal done. They have the visionaries who could bring about the technology/communications convergence which is inevitable. As yesterday's Wall Street Journal pointed out the fact that AT&T may be a takeover target, the sage's at Microsoft should find it irresistable that they can use their stock as currency to lock a prodigious amount of net asset value in such a deal.

Microsoft has a market cap of approx. $290 billion.
AT&T has a market cap of only $75 billion at the current, almost arbitrage market price.
Despite the fact that AT&T had about 62 billion in revenue last year versus Microsoft's mere $22.9 billion, Microsoft had higher net income of $9.4 billion versus AT&T's $8 billion dollars.

It's obvious that MSFT has the stronger currency and stronger leadership and vision than AT&T. Microsoft could expedite the next generation of internet, communications and technology by leaps and bounds and possibly be the savior of AT&T shareholders.

You might say that this is a stretch given MSFT's difficulties with the "Justice Department" and I use that oxymoron losely, but given the price of AT&T at this time, Bill Gates could almost do the deal with his own portfolio. If they were able to buy at net asset level, which would be about $30.00 per AT&T share, they would be getting the name, the customers, and all of the "goodwill" for free. I believe that it would be expedient to take a close look.

posted 10-18-2000 06:41 PM         

Company Name (Ticker): reported, expected, same q last year