Internet Market Close Report for 1998.02.11
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ISDEX & Market Moves Snapshot
|11-Feb-98||% change||point change|
|ISDEX Geometric Average||122.17||2.85%||3.39|
|ISDEX Price Weighted Composite||955.72||2.85%||26.50|
1) Sprint will purchase approximately 30 percent minority stake in EarthLink, as follows:
* Sprint will initiate a tender offer for 1.25 million EarthLink common shares at $45 per share;
* Sprint will receive 4.1 million shares of convertible preferred stock directly from EarthLink; and
* Sprint will secure status as the exclusive telecommunications provider promoted in EarthLink's channels.
2) In exchange for 4.1 million preferred shares and the right to tender for 1.25 million common shares, Sprint will provide EarthLink with:
* All of Sprint's approximately 130,000 Internet Passport subscribers;
* A five-year commercial agreement for Sprint to promote EarthLink
through its marketing channels, including commitments to generate a
minimum of 150,000 new EarthLink members annually;
* A four-year network contract allowing EarthLink to utilize Sprint's
world-class data IP network at favorable prices;
* Approximately $24 million in cash;
* A $100 million line of credit in the form of convertible debt for
EarthLink's use, available incrementally over the first three years; and
* Agency status to bundle Sprint's telecommunications services with EarthLink services.
We've written about AOL many times and think that it's in a great position to leverage all things Internet, if it can see the need to ditch its own closed software system, overhaul its miserable email system that now seems like 100% spam (at least in my mailbox which I can no longer even use it's so bogged down with absolute garbage), capitalize Digital Cities as a separate entity, and free up the mass of content buried under layers of pages.
Critics and critiques aside AOL still rules the roost on Main Street and Wall Street.