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Internet Hardware Mergers Heat Up as MindSpring Enters Talks with Businesses

Strategic Insights

— 1 min read

As the internet hardware industry continues to consolidate, MindSpring's recent announcement that it is discussing potential business combinations with other companies has sent shares skyrocketing. The speculation surrounding MindSpring's future has fueled a rapid run-up in its stock price, with shares rising 45% in the past eight days to a market value of $2.52 billion.

Key Takeaways:

  • MindSpring is discussing possible business combinations with other companies, sparking speculation about potential mergers and acquisitions in the internet hardware industry.
  • Shares of MindSpring rose $3.50 to $82.12 1/2, giving the company a market value of approximately $2.52 billion, a 45% increase in the past eight days.
  • MindSpring's discussions with other companies are part of a broader trend of consolidation in the internet hardware industry, with companies seeking to expand their offerings and reach more customers.
  • Analysts believe that an alliance between MindSpring and a major PC manufacturer could attract greater numbers of new users to MindSpring, and potentially give the company the financial ammunition it needs to reach its goal of becoming the No. 2 ISP in the country.
  • MindSpring has already formed partnerships with nearby companies Knology and BellSouth to offer high-speed Internet access via cable modems and DSL telephone lines.
  • The company's chairman, Charles Brewer, has expressed interest in acquiring the Microsoft Network's dial-up internet service, although analysts are divided on whether Microsoft wants to hold on to the venture or divest it and focus on its web offerings.

Statistics:

  • MindSpring's market value: approximately $2.52 billion
  • Share price increase in the past eight days: 45%
  • Number of MindSpring subscribers: 1.2 million
  • Number of America Online subscribers: 17 million
  • Target for MindSpring to become 2nd ISP in the country: behind America Online
  • Date the iToaster Internet-ready computer is expected to begin shipping: mid-July
  • Price of the iToaster Internet-ready computer: $199

Sources:

  • Bloomberg News
  • MSNBC.com
  • Jupiter Communications
  • MindSpring SEC filings
  • Media Metrix SEC filings
  • TheGlobe.com SEC filings
  • Salon SEC filings

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