Turkey Talk

Turkey Talk

Turkey Talk

Moneybox
Commentary about business and finance.
Nov. 25 1998 11:01 AM

Turkey Talk

It was a short week marked by merger mania on Wall Street, as a host of firms ranging from the staid (Deutsche Bank) to the boring (Tyco added yet another in a long line of companies) to the front-page-worthy (AOL's acquisition of Netscape). It was also a week marked by a new level of Internet insanity, as the AOL-Netscape deal sent small investors flooding into the market for any .com company. So there'll be plenty to talk about at the dinner table as you fight over that extra drumstick and tell your relatives to stop telling the story of that error in judgment you committed when you were 13.

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Instead of Cocktail Chatter, then, we offer up a big helping of Turkey Talk. Here's hoping it's enough to get you through tomorrow without any need for violence involving a fowl.

 

1. "On the day the AOL-Netscape talks were announced, Yahoo!'s stock soared more than 20 points. Considering that AOL's acquisition of Netscape would bring a deep-pocketed, consumer-savvy rival into Yahoo!'s core business, can we hold up this as an excellent disproof of the theory of investor rationality?"

2. "AOL's acquisition of Netscape is apparently part of a strategy that will allow AOL to compete more successfully for the business market. I don't know. What will that look like? 'Hello, you've got inventory reports'?"

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2a. "Netscape employees are supposedly concerned because AOL's audience is so middlebrow, presumably as opposed to the techno-hip who only use the Web. Hey, Netscape programmers! You're geeks and you always will be! Get over it."

3. "Everyone's taking the recent spate of mergers as a sign that corporate executives are bullish about the future and that they don't believe the stock market is overvalued. But almost all of the recently announced deals are in the form of stock swaps. So maybe the acquiring executives really think that their own companies' stocks are overvalued, and that now's a good time to go on a shopping spree with the funny money."

4. "The Boston Red Sox offered Yankee centerfielder Bernie Williams a contract worth somewhere between $78 and $90 million over seven years. At this point, the Yankees should just say, 'Bernie, we love you. But we don't love you that much.'"

5. "Hedge fund D.E. Shaw, which built a high-flying reputation on the basis of its quantitative strategies for investing, announced that it's seeking a partner or, more likely, a buyer for its equity trading business. The company insists that the unit block is actually very profitable, but that BankAmerica's decision to stop working with Shaw meant that the company was having a hard time gaining access to cheap capital. But if you bought this business, what would you be buying? Just a bunch of traders? 'I'll give you one dollar for the lot.'"

6. "Never in the history of business has a company been happier about having a new competitor than Microsoft is about America Online. I suspect the conspiracy theorists are already showing how Microsoft secretly helped arrange the AOL-Netscape deal. 'See, it was Gates on the grassy knoll.'"

7. "FedEx faced down its pilots, who agreed to rescind their strike threat and come back to work before signing a new contract. Ah, what a relief. Now I can still order those gifts from J. Crew on Christmas Eve and not worry about arriving empty-handed the next day."