Continue reading EarthLink Class Action Ends in Refunds and Reduced Fees

EarthLink Class Action Ends in Refunds and Reduced Fees originally appeared on BloggingStocks on Wed, 07 Apr 2010 15:30:00 EST. Please see our terms for use of feeds.

The Associated Press reports that BloggingStocks' parent, Time Warner (NYSE: TWX), beat Wall Street expectations by a penny a share. But its profit was still down -- 26% thanks to declining subscriber fees at AOL and lower advertising revenues at magazines like Time and Sports Illustrated.

But after adjusting for one-time gains, Wall Street was expecting Time Warner to make 23 cents a share and it actually earned a penny more. In addition, revenues rose 5% to $11.6 billion, 1.2% more than expected.

The bad news is that AOL's subscription revenue fell 29% which drove a 36% decline in operating income. As I posted, the 2006 change in strategy to emphasize advertising over subscriptions has not been able to make up for $2 billion in lost revenue. Advertising revenue rose a mere 2% to $530 million -- not enough to make up the difference.

What does the future hold? Time Warner is selling the 84% of its cable operations that it still owns to shareholders later in 2008. Cable's revenues grew 7% on "increases in cable, Internet phone and video-on-demand fees." And it is trying to sell the dial-up portion of AOL to Earthlink (NASDAQ: ELNK).

Continue reading Time Warner beats expectations, but stock falls as investors wonder where growth will come from

Time Warner beats expectations, but stock falls as investors wonder where growth will come from originally appeared on BloggingStocks on Wed, 06 Aug 2008 10:25:00 EST. Please see our terms for use of feeds.

The Wall Street Journal (subscription required) reports that BloggingStocks' parent -- Time Warner (NYSE: TWX) -- is almost done with the work of separating AOL's 8.7 million subscriber dial-up business from its advertising one. And Earthlink (NASDAQ: ELNK), with 3.3 million subscribers, appears to be the logical partner -- particularly if it's willing to pay more than the $2 billion to $3 billion the Journal estimates its worth.

When AOL announced two years ago that it was going to get out of the Internet access business and focus on advertising, I wondered how it would come up with the roughly $2 billion it would lose from the plan to give away all of AOL's content and services to subscribers who don't use AOL for dial-up access. The plan was to replace that cash flow with advertising sales. But the most recently available comparison shows that AOL's revenue has declined 43% from $1.981 billion in Q1 2006 to $1.128 billion in Q1 2008. A 64% drop in subscription revenues to $559 million was not offset by the 41% increase in advertising revenues to $552 million.

Still, I think the idea of combining AOL's shrinking dial-up business unit with Earthlink could benefit Time Warner and yield some cost savings that would boost Earthlink's cash flow.

Continue reading Will Time Warner get $15 billion for a split-up AOL?

Will Time Warner get $15 billion for a split-up AOL? originally appeared on BloggingStocks on Mon, 04 Aug 2008 10:00:00 EST. Please see our terms for use of feeds.

I've seen it many times: a cool product that finds few customers. That seems to be the case with Helio's mobile phones. Basically, customers didn't want to pay premium prices for such things as access to MySpace and other new-fangled features.

It's a tough lesson (and expensive). SK Telecom and EarthLink (NASDAQ: ELNK) formed Helio as a joint venture in 2005 with start-up capital of $440 million. SK Telecom invested an additional $270 million in the venture last year.

Yet, in the end, Helio turned out to be a big dud. That is, the company sold out for a measly $39 million to Virgin Mobile USA (NYSE: VM). In fact, the space is full of dead companies, such as Disney Mobile and Amp'd Mobile.

I had a chance to interview Frank Dickson, the co-founder and chief research officer of MultiMedia Intelligence. According to him:

Honestly, the merger is a desperate move. Overall, the MVNO (Mobile Virtual Network Operator) model makes sense in a limited number of situations. For example, if a cable MSO wants to leverage its customer base and offer triple or quadruple play offering, there is a clear distinctive competency and the MVNO route makes sense.

Continue reading Virgin Mobile buys Helio for chump change

Virgin Mobile buys Helio for chump change originally appeared on BloggingStocks on Sun, 29 Jun 2008 15:10:00 EST. Please see our terms for use of feeds.

The ARS market has thrust its poisoned tentacles in another direction. After raising interest costs for issuers and wiping out the formerly "safe" cash holdings of individual investors, the Wall Street Journal reports that frozen ARS accounts have hit tech companies as well.

Specifically, the Journal lists $855.7 million worth of ARS holding on the books of these five tech companies, listed as follows:

• Monster Worldwide, Inc. (NASDAQ: MNST): $357 mm
• Intuit, Inc. (NASDAQ: INTU): $328 mm
• Palm, Inc. (NASDAQ: PALM): $74.7 mm
• Earthlink, Inc. (NASDAQ: ELNK): $60 mm
• MetroPCS Communications, Inc. (NASDAQ: PCS): $36 mm

These companies and others will probably need to write down the value of these securities unless the ARS market unfreezes. If there is an industry that's unscathed by this problem, I'd like to know. But for those who've invested in companies whose cash is frozen in these ARS accounts, there are many restless nights ahead.

Continue reading $330 billion Auction Rate Securities freezes tech cash

$330 billion Auction Rate Securities freezes tech cash originally appeared on BloggingStocks on Fri, 28 Mar 2008 17:31:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Once thought to be extremely safe, action rate securities have proved difficult to sell in this credit crisis. Tech companies are big holders of them and are taking charges left and right, including MetroPCS Communications Inc (NYSE: PCS), Palm Inc (NASDAQ: PALM) and Earthlink Inc (NASDAQ: ELNK), according to the Wall Street Journal.
• Electronic Arts Inc (NASDAQ: ERTS) is again urging Take-Two Interactive Software Inc (NASDAQ: TTWO) to negotiate after it recommended that its stockholders not sell any of its shares to EA and help its $2B takeover bid, the Financial Times reported.

• NYSE Euronext Inc (NYSE: NYX) will look to increase its stakes in India's National Stock Exchange and the country's Multi Commodity Exchange, the Business Standard reported, once foreign ownership rules are eased. NYSE Euronext also intends to partner with the two Indian exchanges in order to help them develop their business.

• Business Week reported that Brian Marckx of Zacks Investment Research said Bristol Myers Squibb Company (NYSE: BMY) may be an attractive takeover candidate for a larger pharma such as Pfizer Inc (NYSE: PFE) or France's Sanofi-Aventis SA (NYSE: SNY), both of which have been partners with Bristol on some of its products.

Newspaper wrap-up: Tech firm profits hurt by auction rate securities originally appeared on BloggingStocks on Fri, 28 Mar 2008 08:00:00 EST. Please see our terms for use of feeds.

This week, EarthLink Inc. (NASDAQ: ELNK) announced its Q4 results. There was a loss of $9.5 million, or $0.08 per share, which included a $31.1 million write-off from its wi-fi assets.

And, yes, now the company wants to offload the segment. So what does this mean for EarthLink, as well as the space?

Well, I had a chance to interview Craig Settles, who is the author of After Muni Wireless Comes to Town. According to him:

Probably the most common question this sale generates is, why would anyone want to buy the business? It ultimately depends on how much is the asking price, and what actual assets come with the deal. If you look back at Metricom, who marketed Ricochet, they didn't get a whole lot when they sold their business out of bankruptcy court.

Continue reading EarthLink puts its wi-fi division on the block

EarthLink puts its wi-fi division on the block originally appeared on BloggingStocks on Sun, 10 Feb 2008 14:10:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• General Motors Corporation (NYSE: GM) is expected to announce as soon as today that it is selling its medium-duty truck unit to Navistar International Corporation (OTC: NAVZ), reported the Wall Street Journal.
• Its balance sheet is clean and straight forward, debt is less than 25% of capital, it produces over $70M a year in operating cash, pays a 3.5% dividend and buys back its stock, but, asks the Wall Street Journal's "Smartmoney Stock Screen" about Journal Communications Inc (NYSE: JRN), is this stock a bargain or perhaps a takeover candidate?

• According to two people familiar with the matter, the FTC is expected to approve the proposed $3.1B acquisition of DoubleClick by Google Inc (NASDAQ: GOOG), the Washington Post reported.

• According to an inside source, Earthlink Inc (NASDAQ: ELNK) executives, including an executive VP and a VP, have left the company over the last week, DSLreports.com noted. The company is also cutting VOIP and Muni-Wifi services, in addition to the previously announced job cuts.

Newspaper wrap-up: FTC expected to approve Google-DoubleClick deal originally appeared on BloggingStocks on Thu, 20 Dec 2007 08:30:00 EST. Please see our terms for use of feeds.

This week, EarthLink (NASDAQ: ELNK) continued its moves to restructure operations. The new initiative? Well, it is to explore "strategic alternatives" for its municipal Wi-Fi business. In other words, the company is looking for a buyer for the division.

To get a perspective on things, I had a chance to interview Craig Settles, an expert on muni Wi-Fi and the author of Fighting the Good Fight for Municipal Wireless.

According to him:

"The only ones who see this announcement as a cause for pause - whether detractors or supporters of municipal broadband - are people who continue to be distracted by the concept of muni networks as a consumer-centric application. Those of us who've said since 2006 that these networks' viable business case lies with local governments and businesses looking to improve operations understand that this is a logical progression for EarthLink. EarthLink could very well unveil services that position it to meet these needs.

Continue reading Earthlink not so high on muni Wi-Fi

Earthlink not so high on muni Wi-Fi originally appeared on BloggingStocks on Tue, 20 Nov 2007 14:40:00 EST. Please see our terms for use of feeds.

Frequently, the difference between a successful investor and one less so is all timing. Making money in the market requires not only picking the right companies to invest in, but also deciding when (or when not) to invest in such companies.

I rediscovered Earthlink (NASDAQ: ELNK) last year while running a value screen. Like many stocks that end up in the proverbial value barrel, this company was once a high flier, trading at a split-adjusted $50, while now trading around $8. There were highs and lows, culminating in Earthlink's founder being charged with fraud and money laundering. I recalled that Earthlink was in the now-dying dial-up ISP business during the bubble days of the internet and decided to dig a little deeper.

What I saw, when I looked under the hood, caught my attention. While Earthlink was indeed seeing dial-up customers dial-out of their contracts, Earthlink was converting a good percentage of these customers to DSL service. It was working well -- while the company wasn't growing much, it was producing a lot of cash from operations and instead of just building a cash horde, like many companies would do in a situation like this, the company was looking to reposition itself with two major, seemingly sexy initiatives.

Continue reading Earthlink (ELNK): Why-Fi?

Earthlink (ELNK): Why-Fi? originally appeared on BloggingStocks on Sun, 18 Nov 2007 11:10:00 EST. Please see our terms for use of feeds.

Continue reading Muni Wi-Fi -- a permanent casualty of EarthLink's (ELNK) restructuring?

Muni Wi-Fi -- a permanent casualty of EarthLink's (ELNK) restructuring? originally appeared on BloggingStocks on Tue, 04 Sep 2007 14:40:00 EST. Please see our terms for use of feeds.

Over the years, the Internet Service Provider wars have left numerous competitors in the dust. One of the survivors is based in Atlanta and its stock is up on plans to restructure.

EarthLink (NASDAQ: ELNK) provides Internet access and communications services to individuals and business customers in the United States. Offerings include narrowband access, DSL broadband access, municipal wireless broadband, voice over Internet protocol telephone service, and Web hosting. The company has over five million subscribers. Competitors include AT&T (NYSE: T) and Microsoft (NASDAQ: MSFT).

The company surprised investors earlier in the week, when it announced that it will cut about 900 jobs as part of a restructuring to reduce costs. Most of the $60-70 million in associated charges will be recognized in the third and fourth quarters. Also, the board added another $200 million to its authorized buyback program. Soleil and Janco Partners subsequently upgraded the issue to "buy".

Continue reading EarthLink (ELNK): A long-term ISP survivor

EarthLink (ELNK): A long-term ISP survivor originally appeared on BloggingStocks on Fri, 31 Aug 2007 15:26:00 EST. Please see our terms for use of feeds.

Continue reading Playing the market in coming months

Playing the market in coming months originally appeared on BloggingStocks on Thu, 09 Aug 2007 12:58:00 EST. Please see our terms for use of feeds.

San Francisco's WiFi project gets goofy originally appeared on BloggingStocks on Wed, 08 Aug 2007 19:00:00 EST. Please see our terms for use of feeds.

For broadband providers such as Charter Communications (NASDAQ: CHTR), EarthLink (NASDAQ: ELNK), Time Warner Cable (NYSE: TWC), and Virgin Media, its necessary to have a portal. However, it's not cheap to build this technology -- or keep up with the latest innovations.

Well, it's a big opportunity for Synacor, which has a turnkey portal platform. And now the company plans to go public.

Synacor's system is highly flexible. A customer can allow for subscriber personalization, video, premium services, and so on. There are also extensive relationships with content providers, like CNN, CinemaNow, Fox Sports Interactive Media, MLB Advanced Media, and NASCAR.

The business model includes subscriber-based revenues as well as search monetization, which involves a deal with Google (NASDAQ: GOOG). From 2004 to 2006, revenues increased from $2.3 million to $26 million. Although, there was a loss of $2.2 million last year.

The lead underwriters on the IPO include Deutsche Bank Securities and Bear Stearns (NYSE: BSC). The proposed ticker symbol is SYNC. You can find the prospectus on the SEC website. Also, check out more recent IPO filings.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Synacor, the behind-the-scenes portal originally appeared on BloggingStocks on Sat, 04 Aug 2007 14:40:00 EST. Please see our terms for use of feeds.

Amazon has been what Wall Streeters call a "stalled-story". That means the company took most of 2004-2006 to build very expensive infrastructure and spent heavily on heavy marketing expenses to acquire customers. This spending spree took the winds out of Amazon's sails for those three years. Earnings growth, visibility and momentum suffered as did the share price.

Amazon: A long-term investment or a short-term trade? originally appeared on BloggingStocks on Thu, 26 Jul 2007 14:05:00 EST. Please see our terms for use of feeds.

Continue reading Forget the Earthlink report, buy for the 'free options'

Forget the Earthlink report, buy for the 'free options' originally appeared on BloggingStocks on Tue, 24 Jul 2007 19:56:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• CIBC upgraded shares of RF Micro Devices Inc (NASDAQ: RFMD) to Sector Outperformer from Sector Performer as the firm expects the company to benefit from improving late CY07 trends.

• Deutsche Bank upgraded shares of Bristol-Myers Squibb Co (NYSE: BMY) as the firm believes strong Q1 results suggest sustained earnings recovery may be ahead.

• AG Edwards believes Colgate's (NYSE: CL) cost cutting efforts have been paying off, creating a greater "position of strength" for the company, upgrading shares of to Buy from Hold.

• Cowen raised EarthLink Inc (NASDAQ: ELNK) to Neutral from Underperform, believing downside was limited given core business cash flow.
  

• Hutchinson Technology Inc (NASDAQ: HTCH) was upgraded to Hold from Sell at W.R. Hambrecht, believing their thesis has played out and that further risks to estimates are priced into shares at current levels...

• Ciena Corp (NASDAQ: CIEN) was upgraded to Overweight from Market Weight at Thomas Wiesel, citing accelerated strength growth specific opportunities and improving sector fundamentals.

• Banc of America raised shares of M&T Bank Corp (NYSE: MTB) to Neutral from Sell.

• Goldman upgraded shares of Continental Airlines, Inc (NYSE: CAL) to Buy from Sell.

• Longbow Research upgraded shares of Cummins Inc (NYSE: CMI) to Neutral from Sell.

• Wedbush upgraded shares of Deckers Outdoor Corp (NASDAQ: DECK) to Buy from Hold.

Analyst upgrades 4-30-07: BMY, CL, CAL and CIEN originally appeared on BloggingStocks on Mon, 30 Apr 2007 10:58:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Canaccord Adams downgraded shares of Insituform Technologies (NASDAQ: INSU) to Underweight from Neutral following the company's reduced outlook and announcement to exit the tunneling business.

• Prudential downgraded shares of Ameristar Casinos (NASDAQ: ASCA) to Underweight from Neutral on valuation following the recent run-up due to speculation the company will be sold; based on management statements, Prudential believes a company sale is unlikely.

• Buckingham cut Christopher & Banks (NYSE: CBK) to Underperform from Neutral.

• ABN AMRO downgraded shares of British Airways plc (NYSE: BAB) to Sell from Hold as the firm believes profits on trans-Atlantic routes may drop from increased competition due to the "open skies" agreement between the European Union and the U.S.

• JP Morgan downgraded China Unicom Limited (NYSE: CHU) to Underweight from Neutral.

• RBC cut Paychex, Inc (NASDAQ: PAYX) to Sector Perform from Outperform.

• Matrix USA downgraded EarthLink, Inc (NASDAQ: ELNK) to Sell from Hold and WCI Communities, Inc (NYSE: WCI) to Strong Sell from Hold on valuation.

Analyst downgrades 3-30-07: Ameristar Casinos, Paychex & Earthlink downgraded today originally appeared on BloggingStocks on Fri, 30 Mar 2007 11:19:00 EST. Please see our terms for use of feeds.

Engadget writes that Vonage Holdings Corp. (NYSE:VG) may be teaming up with Earthlink, Inc. (NASDAQ:ELNK) to offer a WiFi-enabled phone that can allow VoIP calls but can also switch to a cellular signal if the WiFi signal is not available.

Although the product may be the offering of two weak companies, there may well be a market for inexpensive handset service, and the program might help get the two companies out of the mud. Earthink's stock traded at close to $12 a year ago. Now, it is just above $7. Its transition from being an ISP to a company that builds out WiFi has been a tough one. Cities have been slow to approve widely distributed WiFi.

Vonage's problems have been worse. The stock has dropped from $17.25 to $5.48. Despite growing revenue and smaller losses, Wall Street is concerned that the company cannot compete with cable companies that bundle VoIP service with broadband and TV.

Neither company has a good way out, but offering a joint product may be a beginning

Douglas A. McIntyre is a partner at 24/7 Wall St.

Is Vonage going WiFi? originally appeared on BloggingStocks on Wed, 21 Feb 2007 09:43:00 EST. Please see our terms for use of feeds.