Friday, June 25, 1999

"I am the world's worst salesman; therefore, I must make it easy for people to buy." -- Frank Woolworth

Latest Market Numbers

Amazon Hires President

Adding badly needed depth to its senior management team, online retailer Amazon.com (Nasdaq: AMZN) named Joseph Galli, a former top executive at Black & Decker (NYSE: BDK), its first president and chief operating officer. Galli will report directly to founder and CEO Jeff Bezos. The bizarre twist is that the news came after Galli had twice indicated that he would take a top post at PepsiCo (NYSE: PEP).

It appears that Galli was on the brink of becoming president and CEO of Frito-Lay North America, PepsiCo's domestic snack-food division. According to The Wall Street Journal, PepsiCo says Galli had met with PepsiCo CEO Roger Enrico yesterday morning and had actually signed an employment letter. But Galli changed his mind and said he chose Amazon because, he said, "I want to be part of the new economy, and because I'm excited about the opportunity to work with Jeff Bezos."

It's likely that Amazon won the tug of war over Galli through a sweet compensation package with options on at least 1.5 million shares that are probably attractively priced, to say the least. Galli was president of Black & Decker's Worldwide Power Tools and Accessories unit until April. He had been with the company for 19 years. "Joe is a star with great customer instincts and true operation excellence,'' Bezos said of his new No. 2. "We look forward to having his passion, leadership and motivational skills at the company.''

News To Go

America Online (NYSE: AOL) is reportedly in talks with privately held Microworkz.com Corp. about including AOL's service in the PC maker's computers and even producing an AOL-branded computer. On Monday, at the PC Expo trade show in New York, Microworkz unveiled its new $200 PC/Internet appliance, which uses no Microsoft (Nasdaq: MSFT) software -- it uses a unique combination of the Linux and Be Inc. operating systems.

An AOL-branded PC could damage the government's antitrust case against Microsoft (Nasdaq: MSFT), since it would show that competition against the software giant is alive and well. On a separate note, the U.S. Justice Department and Microsoft secretly met three weeks ago to search for a way to settle the ongoing antitrust suit against Microsoft, according to The Wall Street Journal. Citing an unnamed source, the Journal reported that "the dialogue is going to continue," though no meeting date was set.

Right after closing its acquisition of Ascend Communications, Lucent Technologies (NYSE: LU) announced it will acquire Nexabit Networks, a privately held start-up developer of high-performance Internet Protocol (IP) wide area network (WAN) switching/routing equipment, for about 14 million Lucent shares. Based on yesterday's close, the deal is worth roughly $900 million. The deal is expected to be neutral to fiscal 1999 and 2000 earnings.

Defense contractor Lockheed Martin (NYSE: LMT) is looking to shed at least $1 billion in assets as part of a restructuring aimed at restoring profits and investor confidence, The Wall Street Journal reported. Assets that might go include its military-aircraft electronics businesses -- such as those making radar, cockpit displays and weapons-firing systems -- as well as parts of an information-services unit and a business providing energy and environmental services.

Taiwan's largest carrier, China Airlines, is about to buy 13 B747-400 cargo jets from Boeing (NYSE: BA) and seven passenger jets from either Boeing or rival Airbus Industrie in orders worth $2.8 billion, Taiwan's Commercial Times reported, citing unnamed airline officials. China Airlines will also take options for four more B747-400 and five more passenger planes worth $1.2 billion at list prices, the paper reported.

Tuboscope Inc. (NYSE: TBI), which specializes in removing waste from fluids used in oil drilling, has agreed to buy Newpark Resources (NYSE: NR), which disposes of that waste, for $833 million in stock and assumed debt. The deal values Newpark shares at $9.26 a pop based on yesterday's close. Newpark was trading at $10.75 before trading was halted.

Metal-castings maker Citation Corp. (Nasdaq: CAST) said it has agreed to be acquired by closely held Kelso & Co. for about $643.8 million, including assumed debt. At the same time, Citation warned that it expects fiscal third-quarter earnings to come in around $0.28 a share, short of analysts' mean estimate of $0.40.

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