DNAprint Genomics (DNAG)

[IVRT]

Raging Bull loses its punch

by Heidi Nasr
Posted 06:54 PM EST, Dec-26-2000


When AltaVista Co. grabbed investor information Web site Raging Bull by the
horns in February for $163 million, the U.S. search engine had high hopes of
being more than an Internet portal.

Less than a year later, Palo Alto, Calif.-based AltaVista announced that it had
hired U.S. investment bank Chase H & Q to find a buyer for Raging Bull. An
AltaVista press officer said the company wants to return to its search engine
roots.

But buyers won't be easy to find, said U.S. Bancorp Piper Jaffray analyst
Safa Rashtchy, who covers AltaVista parent CMGI Inc. of Andover, Mass.
The reason: Raging Bull provides financial information and chat rooms for
individual investors, a group that is no longer as irrationally exuberant as it
was in February.

"The days of day-traders and prices jumping through the roof are over,"
Rashtchy said. Moreover, he noted that Raging Bull's business model -- a
free-content provider that relies on advertising-revenue -- is decidedly out of
favor these days.

Nonetheless, AltaVista spokesman David Emanuel remained confident. He
declined to name potential acquirers of Andover, Mass.-based Raging Bull
but said that discussions with two or three companies were "pretty serious."

Emanuel also declined to comment on a possible sale price or target date for
the sale. But he said that AltaVista hopes to find a buyer in six to eight
weeks.

Emanuel said that AltaVista will look for an acquirer with a similar strategy in
one of three categories: content companies, financial services companies
and media companies.

The scuttlebutt on the deal seems to bear out his expectations. Potential
buyers mentioned in the press after Alta Vista announced the sale over the
holiday weekend included E*Trade Group, Charles Schwab Corp. and
Ameritrade Group among the financial services companies and
TheStreet.com and MarketWatch.com on the content or media sides.

Piper Jaffray's Rashtchy said that E*Trade or Ameritrade are more likely
possibilities than Schwab, since those two companies don't have discussion
boards and would probably welcome the chance to reach out to the average
investor. Schwab's customers, in contrast, are "high-end" and not attracted to
discussion boards, Rashtchy said.

TheStreet or MarketWatch are even less likely acquirers, Rashtchy said.
"They're having troubles of their own," he said. Ameritrade, however, could
offer Raging Bull as an additional service to its existing customers, Rashtchy
said.

The "for sale" sign on Raging Bull in certainly indicative of the times. Once
the blue-eyed boy of the Internet content revolution back at its birth in late
1998, the startup attracted sizable venture capital investments from CMGI's
@Ventures and CNET.com.

The Web site had gathered awards, recognition and lavish attention from the
press when AltaVista announced it would acquire Raging Bull in late
November 1999. By the time the acquisition closed in February, however, the
market was already preparing for its coming and sustained slump in the
spring.

AltaVista, of course, paid for the acquisition amid the high-flying valuations of
late 1999, when Raging Bull commanded a $163 million all share purchase
price. Now, Rashtchy says, the purchase price will have to be "substantially
below that."

AltaVista bought Raging Bull in an all-stock deal last year. Since both
companies are privately held, it's hard to know how much their stock would
be worth today. But in the intervening months, the stock price of AltaVista's
parent, CMGI, has declined precipitously.

When AltaVista first announced it would acquire Raging Bull, CMGI stock
was trading at $155.50, close to its 52-week high of $163.50. When the
acquisition closed in February, CMGI stock was dented but still comfortable
at $124.50.

Since then, however, the market has shown no mercy. CMGI shares closed
Tuesday at just above $6.37.

Rashtchy declined to speculate on reported price ranges of around $100
million for Raging Bull. But he added: "Many of [these types of] companies
these days are going for a fairly minimal amount."

Yet disposing of Raging Bull makes sense to Rashtchy. "It is consistent with
what AltaVista wants to do," he pointed out. "They have given up on being a
portal."
http://www.ragingbull.altavista.com/mboard/boards.cgi?read=118071&board=IBUI