<BREAKFAST WITH THE FOOL>

Tuesday, May 25, 1999

"Anyone who believes that the competitive spirit in America is dead has never been in a supermarket when the cashier opens another checkout line." -- Ann Landers

Latest Market Numbers

Move Over, Amazon?

barnesandnoble.com (Nasdaq: BNBN) sold 25 million shares at $18 a pop, raising $450 million in its initial public offering (IPO) yesterday. The price was at the top of the expected $16 to $18 range, which was already up from a previous $11 to $13. It gave the online bookstore a market capitalization of $2.52 billion. Parent companies Barnes & Noble (NYSE: BKS) and German media giant Bertelsmann AG sold 18% of barnesandnoble.com, and each retained a 41% interest in the online bookseller.

The IPO took place on a day when Internet stocks took a hit. The Dow Jones Internet Index dropped 8% yesterday and is down 26% from its April 13 peak, though the index is still up 50% for the year. Leading online bookstore Amazon.com (Nasdaq: AMZN) lost $11 1/16, or 8.6%, to $117 1/2. That's down from a 52-week high of $221 1/4. Brick-and-mortar bookseller Barnes & Noble also shed $3 1/8, or 9%, to $31 3/4, compared with a 52-week high of $48.

Last Monday, Amazon started selling New York Times bestsellers at a 50% everyday discount. Both barnesandnoble.com and Borders Group's (NYSE: BGP) Borders.com matched the discount. Upstart bestsellersforless.com, which had not compared its listed prices to retail prices but rather to Amazon prices, slashed its prices to 60% off, though the site appears to be down until June 5 without a real explanation. In the meantime, bestsellersforless.com is recommending that its customers visit barnesandnoble.com, "our second favorite site."

Check out the Fool's one-on-one StockTalk interview with barnesandnoble.com CEO Jonathan Bulkeley.

News to Go

First Union (NYSE: FTU) warned that it expects earnings this year will come in between $3.40 and $3.50 a share, down from the $4.00 a share the company had projected earlier. For the second quarter, the bank anticipates EPS of $0.80 to $0.83 -- analysts were expecting $0.97. The company said its fundamental operations are "strong" but that it is faced with overcoming the impact of "unusual, noncore earnings items, major acquisition integration, and acceleration of spending for major new strategic initiatives."

Internet portal company Lycos Inc. (Nasdaq: LCOS) will join the ranks of the Nasdaq-100 Index beginning Friday, replacing communications-equipment maker Fore Systems (Nasdaq: FORE), which is being acquired by the U.K.'s General Electric Co. PLC.

Federated Department Stores (NYSE: FD) has signed a letter of intent to acquire a roughly 20% stake in privately held Wedding Channel, The Wall Street Journal reported. Wedding Channel operates WeddingChannel.com, where Federated will become the exclusive supplier for many items listed in the site's wedding registry. Wedding Channel's features will be promoted at Federated's 420 stores nationwide.

Website developer Navidec Inc. (Nasdaq: NVDC) is consolidating its 14 existing car-buying sites and forming a wholly owned Internet subsidiary, DriveOff.com, which will sell new cars and compete against the likes of CarsDirect.com and Autobytel.com (Nasdaq: ABTL), according to The Wall Street Journal. DriveOff.com will work exclusively with a national alliance of auto dealers now being organized. The dealers will pay DriveOff.com a setup and monthly marketing fee.

The New York Times Co. (NYSE: NYT) announced it will consolidate its numerous Internet properties into one division, Times Company Digital, which will include almost 50 websites from the company's newspaper, magazine and broadcast groups. Last week, the Tribune Co. (NYSE: TRB), publisher of The Chicago Tribune, said that it would create an interactive unit.

Energy and chemical company Kerr-McGee Corp. (NYSE: KMG) said it has raised its offering price for Sun Energy Partners (NYSE: SLP) to $5.75 a share from $4.52 and settled three class action suits relating to the previously announced roll-up of Sun Energy Partners. The initial $4.52 will be payable upon completion of the merger, while the additional $1.23 will be payable, with interest, upon final court approval of the settlement.

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