<BREAKFAST WITH THE FOOL>

Tuesday, April 6, 1999

"The reason why worry kills more people than work is that more people worry than work." -- Robert Frost

Latest Market Numbers

News Corp. Expands Cable Empire

Rupert Murdoch's entertainment and media empire News Corp. (Nasdaq: NWS) and long-time partner Liberty Media (NYSE: LMG.A) announced a deal in which News Corp. will acquire the 50% stake in Fox/Liberty Networks it doesn't already own. In exchange News Corp. will give Liberty Media, a newly acquired unit of AT&T (NYSE: T), 51.8 million non-voting News Corp. American depositary receipts (ADRs), valued at about $1.425 billion, which Liberty has agreed not to sell for at least two years.

In addition, News Corp. will buy back 56.2 million of its non-voting ADRs from MCI WorldCom (Nasdaq: WCOM) for $1.39 billion, with Liberty then buying half of these and Saudi Prince Al Waleed Bin Talal's Kingdom Holdings buying about 8 million ADRs, adding to his existing 5% stake in the company. The deal will give Liberty an 8% stake in News Corp., making it the company's second-largest shareholder after the Murdoch family, which owns around 30%.

The deal expands News Corp.'s presence in cable TV, especially in entertainment and sports programming. In a statement released to the Australian Stock Exchange, Murdoch said the transaction allows the company to "leverage more fully the FOX brand name across our cable and broadcast properties while giving us added flexibility over our sports and entertainment channels."

The Fox/Liberty Media joint venture, formed in 1996 to challenge Walt Disney Co.'s (NYSE: DIS) ESPN powerhouse, owns full or partial stakes in such properties as regional cable sports channel operator Fox Sports Net, FOX Sports World, and FX. Liberty and News Corp. also each own 44% of TV Guide. The complex deal will also increase News Corp.'s stake in its publicly traded Fox Entertainment Group (NYSE: FOX) unit to 82.7% from 81.4%.

News to Go

Telecommunications giant MCI WorldCom (Nasdaq: WCOM) is reportedly in preliminary talks about acquiring wireless phone company Nextel Communications (Nasdaq: NXTL), though some people involved put the odds of a deal at no more than 50%, as the two phone companies have yet to reach agreements on key terms, including price, according to The Wall Street Journal. Shares of Nextel have risen of late on speculation of a deal with MCI WorldCom or another company.

Wal-Mart Stores (NYSE: WMT) and Amazon.com (Nasdaq: AMZN) agreed to settle their legal battle, in which Wal-Mart had sued Amazon for allegedly stealing trade secrets by recruiting Wal-Mart employees. The settlement requires reassigning at least one former Wal-Mart employee, limiting the job responsibilities of others, and requiring all former employees to return any Wal-Mart property they still have. Also, Amazon and its Drugstore.com affiliate can't recruit Wal-Mart employees for a year but can hire Wal-Mart employees who approach them.

Consumer products maker Gillette (NYSE: G) warned that it expects to report a "mid-single digit increase" in first-quarter earnings per share, which would be about a penny below current analysts' mean estimate, though its largest business -- blades and razors -- is expected to see a double-digit increase in sales. The company is projecting that international markets will improve by the third quarter, putting it on track to return to its historical 15% to 20% EPS growth in the second half of the year.

Coffee roaster and retailer Starbucks (Nasdaq: SBUX) reported that same-store sales for the five weeks ended March 28 increased 6% year-over-year. Comparable-store sales for the 26-week period ended March 28 rose 5%.

Speech recognition software developer Lernout & Hauspie Speech Products NV (Nasdaq: LHSP) announced that chip maker Intel Corp. (Nasdaq: INTC) has agreed to invest $30 million in the company. Last month, Microsoft (Nasdaq: MSFT) increased its stake in Lernout to 7% after first buying an interest in September 1997.

In an effort to "dot com" itself, home-decorative accessories and collectibles maker Media Arts Group (NYSE: MDA) said it plans to "develop an innovative Internet-based retail management information system and e-commerce presence." A conference call replay is available online at vcall.com.

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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor