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To: Labrador who wrote (1)8/20/1998 2:13:00 PM
From: Francis Gaskins
   of 32
 
"Barnes & Noble Plan IPO for Web Site"
zdii.com

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To: Francis Gaskins who wrote (3)8/20/1998 4:38:00 PM
From: Francis Gaskins
   of 32
 
"Barnesandnoble.com to go public" CNET NEWS.COM
news.com
Barnes & Noble, the world's largest
brick-and-mortar bookseller, today announced
plans to spin-off its online unit in an initial public
offering.

Investors cheered the
news, pushing the
company's stock to a 12
percent gain in early
trading, to 41.6875, up
from its close of 37.25
yesterday.

Barnesandnoble.com
had been a drag on
earnings for the
bookstore giant, and had
been clouding its financial picture by creating
confusion about the true value of the company's
online operations and its core retail book business,
analysts said.

"Part of the rationalization was to give investors
greater clarity on the start-up spending for its
Internet operations and the earnings from its core
business," said Danielle Fox, an analyst with J.P
Morgan Securities. "The company will now get a
more accurate valuation."

Barnes & Noble said it plans to file a registration
statement with the Securities and Exchange
Commission within the next 30 days for an initial
public offering of barnesandnoble.com stock. The
bookseller noted that the registration is subject to
market conditions, however. The company plans to
sell up to 20 percent of barnesandnoble.com's
stock to the public.

Analysts were in agreement that the IPO plan is a
good move for Barnes & Noble.

Gary Balter, an analyst with Donaldson, Lufkin &
Jenrette, said the capital barnesandnoble.com will
raise in its IPO will help it better compete with
Amazon.com.

Last year Amazon.com raised $54 million with its
IPO, when it sold 3 million shares at a target price
of $18 a share.

Balter said he doubts that other major players, like
Borders Books and Music, will follow suit with
IPO plans for their Internet operations.

"Borders feels it has an international, domestic, and
Internet strategy, and plans to keep it as one," he
said.

Like Amazon.com, barnesandnoble.com has yet to
generate a profit.

While Barnes & Noble's brick-and-mortar
business posted improved profits for the second
quarter of $7.9 million, the company's online unit
had a net loss of $13.6 million. That loss brought
down the company's overall performance, resulting
in a widened net loss for the quarter of $5.7 million,
compared with a loss of $1.4 million reported a
year ago.

Barnes & Noble, which reported its second quarter
results today, noted barnesandnoble.com generated
revenues of $12.5 million for the second quarter
ending August 1, compared to $2.2 million for the
same year-ago quarter.

Barnes & Noble added that its online unit had more
than 720,000 customers in 175 countries as of
August 1, an increase of 44 percent from 500,000
customers in 158 countries as of May 2, 1998. The
site's "Affiliate Network'' grew to more than
17,000 sites and includes strategic partnerships
with many of the top 20 Web sites, including Lycos
as well as an exclusive relationship with America
Online's proprietary online services.

Barnes & Noble announced its IPO plan in its
second quarter earning report.

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To: Francis Gaskins who wrote (3)8/20/1998 4:52:00 PM
From: Francis Gaskins
   of 32
 
"Barnes & Noble to spin off online unit" CBSMarketWatch

By Darren Chervitz, CBS MarketWatch
Last Update: 11:50 AM ET Aug 20, 1998
----------------------------------------------------------

"Merrill Lynch analyst Daniel Barry wrote in a recent report that he
expects BarnesandNoble.com, which kicked off its first ad campaign in
April, to generate $150 million to $250 million in sales for 1999,
compared with the $650 million in sales expected by Amazon.com."
----------------------------------------------------------

NEW YORK (CBS.MW) -- Shares of Barnes & Noble jumped 10
percent Thursday morning after the bookseller announced its intention to
spin off its online operations in an initial public stock offering.

The company said it will file with the Securities and
Exchange Commission for a BarnesandNoble.com
IPO within 30 days, a possibility mentioned by
CBS.MarketWatch.com on July 29. (See
related story.)

At the time, Barnes & Noble's (BKS) executive
vice president of finance, Marie Toulantis,
acknowledged the company was considering a
spinoff. "We're very well-positioned in the capital markets, and we'll be
exploring all of these options with a view toward enhancing shareholder
value," she said.

Mary Ellen Keating, senior vice president for corporate communications,
said Barnes & Noble will continue to hold about an 80 percent ownership
stake in the online unit after the IPO.

Following Amazon's lead

Analysts and investors had been hoping for some
time that Barnes & Noble would make this move
so that its online operations would be valued along
the same lines as market leader Amazon.com
(AMZN). The pioneer Web-based bookseller's
market cap stands at about $6.3 billion, excluding
debt. That's more than Borders (BGP) and Barnes
& Noble combined, though together the two rivals
generated about 18 times the sales of Amazon in
the trailing four quarters.

According to a recent research report from
Salomon Smith Barney's Maureen McGrath,
Barnes & Noble could be trading about 35
percent higher if its online operations, expected to generate $100 million in
sales this year, were valued like Amazon.com's.

'Subtracting from stock price'

"Its Internet business is subtracting from the stock price, so you either
have to convince people to look at it differently or you have to spin it off,"
said Bill Harnisch, president and chief investment officer of Forstman-Leff
Associates, the largest institutional shareholder in Barnes & Noble.

On the news, Barnes & Noble's stock rose 2 3/4 to 40 in recent trading
of 1.3 million shares.

The benefits of a Barnes & Noble spinoff would go well beyond raising
money and increasing shareholder value, according to observers. "It
would attract a different type of investor and give the Internet venture a
little more focus, which is necessary in a fast-growing and competitive
marketplace," Ryan Jacob, portfolio manager of The Internet Fund and
research director of IPO Value Monitor, said in an earlier interview.

Merrill Lynch analyst Daniel Barry wrote in a recent report that he
expects BarnesandNoble.com, which kicked off its first ad campaign in
April, to generate $150 million to $250 million in sales for 1999,
compared with the $650 million in sales expected by Amazon.com. If
BarnesandNoble.com were valued at just half the multiple of
Amazon.com, the online operation would be worth $8 to $14 a share,
Barry wrote.

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To: Francis Gaskins who wrote (3)8/20/1998 4:53:00 PM
From: Francis Gaskins
   of 32
 
Hot IPOs don't equal huge gains
news.com

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To: Francis Gaskins who wrote (6)8/20/1998 6:22:00 PM
From: Jan Garrity Allen
   of 32
 
Does anybody have any idea who the lead underwriters will be??? Thankx to you all for providing very useful information!!!

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To: Jan Garrity Allen who wrote (7)8/21/1998 6:07:00 AM
From: Jay k.
   of 32
 
Why isn't BKS doing 100% spinoff.
They can charge/share the cost of buying and storing inventories
for the new Internet company. BKS will receive rev/earnings from
NetBKS and all the money they are losing promoting the Internet
will be gone next quarter.
The new Internet company NETBKS.com will be valued similar to AMZN.com
and NETBKS without BKS can spend as much as they want promoting the
new company on the internet. Top line GROWTH.
By keeping 80% of the new company BKS will make valuation of the NETBKS.com linked to BKS stock price.
ATT spinned off LU, I don't see why BKS can't spinoff NETBKS.

B/regards

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To: Jay k. who wrote (8)8/21/1998 1:13:00 PM
From: FR1
   of 32
 
Exactly my feeling. If you are only going to sell 20% of the business to the public you are not really doing a public offering. It is just paperwork. Every expert will be screaming about it and the stock will be viewed as the same as BKS (which it will be).

The reason for IPO spin offs is to give the business independence. So that you are not tied to the government of the parent business and you don't have to turn profits over to HQ. If BKS owns 80%, BKS will call the shots, BKS will take the profits, and it means there is no real IPO.

This is like IBM doing a IPO for the company lunch room on the 12th floor of their corporate HQ.

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To: FR1 who wrote (9)8/22/1998 11:15:00 PM
From: Melissa McAuliffe
   of 32
 
Will a shareholder of bks get any stock in the new company?

Also, just so I understand this better does this mean that bks will be a completelely separate legal entity in whihc bks just happens to own 80% of the stock? In other words on bks income statements once this transaction is completed one will not see any revenue or expense numbers? Isn't there some limit to the amount of a company another company can own without having to report it's number as a subsidiary in consolidated statements?

Thanks.


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To: Melissa McAuliffe who wrote (10)8/24/1998 9:12:00 PM
From: Derald Muniz
   of 32
 
Good questions. I was an employee at The SABRE Group when it was spun off from American Airlines. AA kept 85% of the stock - 15% was spun off to the "public". Ended up being a great deal for AA - not so great for the "public" yet.

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To: Derald Muniz who wrote (11)9/25/1998 11:54:00 AM
From: epicure
   of 32
 
helllooooo- anybody out there? I added to my position today, looking forward to that ipo. Anyone else buying/selling?

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