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Technology Stocks : barnesandnoble.com Barnes & Noble -- Ignore unavailable to you. Want to Upgrade?

To: Francis Gaskins who wrote (3)	8/20/1998 4:38:00 PM
From: Francis Gaskins	Respond to 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.

To: Francis Gaskins who wrote (3)	8/20/1998 4:52:00 PM
From: Francis Gaskins	Respond to 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.