Post of the Day
November 26, 1999

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Subject:  It is the New Internet Medium
Author:  NicholasJG

Quietly Behind the Curtains

Internet time lives up to its expectations. Even Superman would have a hard time flying as quickly or leaping as tall as the Internet industry. Late last night At Home's press release indicated that it would spin off its media assets as a tracking stock sometime in the third quarter of 2000. Amid this announcement, come an array of possibilities and an endless amount lingering questions?

As I soak up the news and read the posts relating to the new tracking stock some essentials become clear. It is clear that this information leaked out early last week. Huge financial firms were suddenly buying massive amounts of At Home stock when they have for the most part stayed far away from this company for many months. They were especially buying ATHM during the last hour on Friday the 19th when 15,000 chunks were being bought up at a single click for what appeared to be no good reason at all. But, as it were, the big firms were buying without caution because the word had come down.

"The importance now is what this trading stock actually means to our company and the direction it gives us."

Day traders fighting for every quarter point have thrown words out like Pigsuckers, Vultures, and Fraudulent Shucks. Of course, if word had come to them they'd probably have done the same. But my point isn't about short-term swings in the stock market and those left without any shares. The axiom I have always lived by is "Buy the Ticket, Take the Ride." Most of us on the At Home board have already bought the ticket. The importance now is what this trading stock actually means to our company and the direction it gives us.

The Loving Relationship

In hindsight, the trading stock deal was a given for many reasons. When Excite@Home bought Blue Mountain Arts it seemed strange that AT&T 's board gave there blessing for the deal with no ill will or constraints -- because this accelerated T's commitment to unwanted content bindings. But, low and behold, AT&T's easy approval of the Blue Mountain Arts deal makes it obvious that before the deal was announced the paper work was already under way for the tracking stock. That is why the deal was so effortlessly passed by T. They knew when they passed the deal that within a year they would have no part of the media portion of Excite@Home anyway.

The important thing to get out of this is that AT&T and At Home are no doubt exactly what Armstrong suggests: in 100% alignment. Ho, Ho. This bodes well for At Home. Once the Media One and T deal is solidified AT&T will be the biggest cable company in the world. It is important that At Home keeps peace with them and does what they need to survive and that they are. In short, At Home needs T's cable wires to succeed on the big playing field and T needs ATHM.

More quiet deals being worked out?

Has anyone else noticed that AOL's stock � that languished for months when there was concern over getting access to broadband pipes -- has suddenly soared for no apparent reason too? IMO, this trading stock deal was nothing more than one significant move making way for another significant deal (known by insiders � hence AOL's stock movement) between T, AOL, and ATHM.

AOL has significant shares outstanding just waiting to be spent. For what? Let me guess. Remember the column by TMFJeff about DSL landing more accounts than broadband cable. And that depending on At Home's management they were headed perhaps to something other than being a Rule Maker?

Ho. Ho. These deals will put At Home into Rule Maker hood and ensure their place in Internet history. It is a different model than Excite@Home on steroids against AOL. It is exactly what TMFNico suggested many months ago. I wish I had the link on hand.

"It is a different model than Excite@Home on steroids against AOL."

Here's the bread and butter of what I'm getting at. A deal in my opinion is being inked between T, AOL, and ATHM right now placing and ensuring that Cable Broadband Subs are "The New Internet Medium" that dominates the access market. AOL gets what they want. T gets want they want. And ATHM is the broadband access of choice by the world, with the help of AOL and etc. A deal worked out by creative attorneys will benefit all three companies and it will solidify all their places in Internet history.

I also think that ATHM (by working with T) will get Roadrunner in the deal too once the merger between T and Media One is completed. Deals like this will be too powerful for occurrences like Optimum Online hurting ATHM's market share and DSL dominating.

Well, ATHMers, this scenario might never happen. And many here will argue that ATHM can't keep up with the pace on installations now and that we do not need AOL etc. � but we have always needed T on our side. Something to think about.

At any rate, time will tell what deal will and won't go down. As a gambling man, I would not bet that nothing else is on the table right now.

Let the Good Times Roll,