FOOL PLATE SPECIAL
An Investment Opinion by MF Nexus6

Death from Above

Less than a decade ago, those convened at the cable TV industry's annual trade show openly derided the potential of Digital Broadcast Satellite (DBS), coining the acronym "Don't Be Stupid" to describe the potential of the seemingly ridiculous mini satellite dishes. Today the battered cable industry is coming together again in New Orleans for its annual conference and the acronym of yesteryear may sound the same, but it has been transformed into a lament. "We should have taken the threat of DBS seriously from the outset," commented one industry executive last week.

With an estimated 4.5 million subscribers, satellite TV still constitutes only a fraction of cable TV's 65 million viewers. Historically satellite TV has been handicapped by its inability to provide its viewers with transmissions from local broadcast stations, requiring customers to use switching hardware or purchase cable connections in addition to their satellite system. NEWS CORP.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %> bid to purchase a 50% stake in ECHOSTAR COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DISH)") else Response.Write("(Nasdaq: DISH)") end if %> raises the specter of a combined entity with the ability to provide not only 500 channel nirvana, but local TV stations as well. With the acquisition, News Corp. will have the physical "etherfrastructure" to spot beam local broadcasts into the top thirty local markets, a possibility that has cable operators worried.

Up until now, DBS companies have been able to provide some local service, but not necessarily the same local service provided in the area in which the satellite signal is beamed. For example, some farmers in rural Montana may be receiving local broadcasts from New York bundled with the rest of their satellite offerings. Legally this can only be done if recipients are in an "underserved" area where reception of their own local broadcaster is difficult or impossible. Since 1994, an amendment to the 1988 Satellite Home Viewer Act put the onus on satellite providers to insure that their consumers were "legal," in addition to providing local stations with a list of new DBS customers in order to insure compliance.

Understandably, the cable industry is attempting to invoke "the force" in a bid to destroy Rupert Murdoch's "death star." Although News Corp. plans to have the new system named "Sky" up and running next year, it must first clear substantial regulatory hurdles, including those related to market concentration, foreign ownership and copyright violations. News Corp's initial deal with EchoStar was a boon to EchoStar's flagging share price. On February 25, shares of EchoStar shot up $8.75 to close at $26.75 on the news that Murdoch's News Corp. was planning to invest $1 billion in the company. Since that time, the share price has retreated to $24, and investors are awaiting additional news concerning the transaction. EchoStar is expected to double its number of shares outstanding in order to accommodate Murdoch's 50% stake. In addition, the company plans to spin off its engineering, manufacturing and international assets into a separate company. Investors whose curiosity has been piqued by the deal are cautioned to wait out the regulatory wrangling.

UPS

Electronic security company ADT LTD. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ADT)") else Response.Write("(NYSE: ADT)") end if %> jumped $3 7/8 to $25 5/8 after agreeing to a merger with conglomerate TYCO INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TYC)") else Response.Write("(NYSE: TYC)") end if %> that values the company at $29 per share.

EMPLOYEE SOLUTIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ESOL)") else Response.Write("(Nasdaq: ESOL)") end if %> gained $1 13/16 to $8 3/16 after releasing Q4 earnings (which were delayed last week) of $0.07 per share on revenues of $149 million, falling short of estimates of $0.14 per share.

Chicago savings bank holding company STANDARD FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STND)") else Response.Write("(Nasdaq: STND)") end if %> rose $2 3/8 to $23 1/2 on agreeing to merge with Midwestern savings bank and financial services company TCF FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TCB)") else Response.Write("(NYSE: TCB)") end if %> in a cash and stock deal valuing Standard at $25 per share.

SYNOPSYS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SNPS)") else Response.Write("(Nasdaq: SNPS)") end if %> gained $1 1/4 to $31 1/4 after the semiconductor design software company was rated a "strong buy" by Morgan Stanley.

MCDONALD'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCD)") else Response.Write("(NYSE: MCD)") end if %> added $1 1/4 to $31 1/4 after BERSHIRE HATHAWAY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BRK.A)") else Response.Write("(NYSE: BRK.A)") end if %> revealed in its Chairman's letter that it has raised its stake in the company to 4.3%.

HERITAGE MEDIA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HTG)") else Response.Write("(NYSE: HTG)") end if %> jumped $6 to $18 1/8 after announcing that it will be acquired for $20.50 per share by NEWS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %>, which will keep the ACTMEDIA marketing subsidiary and sell its radio and TV stations.

DOWNS

Data storage manufacturer OVERLAND DATA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OVRL)") else Response.Write("(Nasdaq: OVRL)") end if %> fell $4 1/8 to $6 1/4 after announcing that it expects sales to be affected by a shortage of supplies from QUANTUM CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QNTM)") else Response.Write("(Nasdaq: QNTM)") end if %>. The company also said earnings will fall only slightly below internal forecasts due to cost savings that would have been realized anyway.

ADVANTA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADVN.A and B)") else Response.Write("(Nasdaq: ADVN.A and B)") end if %> was blasted for a $9 1/4 loss to $31 1/8 after the credit card issuer and financial services company said it will take a loss of $0.44 per share in its Q1 due to higher bankruptcies and higher loss reserves it will set up, as well as lower credit card balances that good credit risks are carrying. The company expects to report full-year EPS of $1.50, well below estimates of $4.49.

"Affinity" credit card issuer MBNA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KRB)") else Response.Write("(NYSE: KRB)") end if %> lost $1 7/8 to $31 1/2, while mortgage company IMPERIAL CREDIT INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ICII)") else Response.Write("(Nasdaq: ICII)") end if %> fell $1 5/8 to $22 1/8 in reaction to the Advanta news.

Mortgage originator GREENPOINT FINANCIAL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPT)") else Response.Write("(NYSE: GPT)") end if %> also lost $2 3/4 to $54, and credit card issuer and processor FIRST USA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FUS)") else Response.Write("(NYSE: FUS)") end if %> fell $1 3/4 to $48 1/8. Other major credit card issuers, such as CITICORP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCI)") else Response.Write("(NYSE: CCI)") end if %>, are not feeling a large pinch on this news.

CIRRUS LOGIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CRUS)") else Response.Write("(Nasdaq: CRUS)") end if %> lost $1 3/8 to $10 15/16 after a U.S. District Court ruled that the company is in contempt of that court by ignoring an injunction to discontinue manufacturing products that infringe upon the copyrights of electronics company Roland.

Drug delivery company EMISPHERE TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EMIS)") else Response.Write("(Nasdaq: EMIS)") end if %> lost $3 to $19 after reporting a Q2 loss of $0.26 per share, below estimates of a loss $0.16. The company also filed to sell 2.5 million shares, significantly expanding its share count.

CARAUSTAR INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSAR)") else Response.Write("(Nasdaq: CSAR)") end if %> lost $2 3/4 to $24 1/4 after PaineWebber downgraded shares of the paperboard manufacturer to "neutral" from "buy."

Rechargeable high-power battery company BOLDER TECHNOLOGIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BOLD)") else Response.Write("(Nasdaq: BOLD)") end if %> lost $3 3/4 to $12 1/8 after the company said a majority of orders scheduled to ship in 1997 will be pushed out into 1998.

Smokeless tobacco company UST INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UST)") else Response.Write("(NYSE: UST)") end if %> was snuffed for a $3 1/8 loss to $30 1/4 after saying that unit volume is down, which will adversely affect the company's goal of growing EPS by 10% this year.

PHILIP MORRIS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %> lost $3 7/8 to $125 1/4 after the U.S. Supreme Court ruled that the State of Florida may sue the company for reimbursement of Medicaid claims arising from smoking-related illnesses.

Electronics distributor BELL INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BI)") else Response.Write("(NYSE: BI)") end if %> slid $2 5/8 to $18 7/8 after the company announced it will report Q1 pro-forma EPS of $0.49, below estimates of $0.57.

PEDIATRIX MEDICAL GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PDX)") else Response.Write("(NYSE: PDX)") end if %> lost $2 to $33 after the physician practice management company announced the sudden resignation of its COO on Friday morning.

Financial transaction processing company STATE STREET BOSTON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STT)") else Response.Write("(NYSE: STT)") end if %> lost $3 7/16 to $75 13/16 after a Massachusetts bank regulator said BANK OF NEW YORK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BK)") else Response.Write("(NYSE: BK)") end if %> cannot acquire the 9.9% stake in State Street agreed to late last year.

TOY BIZ <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TBZ)") else Response.Write("(NYSE: TBZ)") end if %> fell $3 3/8 to $8 7/8 after the company said the bankruptcy of licensor MARVEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MRV)") else Response.Write("(NYSE: MRV)") end if %> is hurting its operating results.

CONFERENCE CALLS

TRO LEARNING <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TUTR)") else Response.Write("(Nasdaq: TUTR)") end if %>
(402) 220-2139 (code: 3137) -- replay until 3/19

MICRON TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MU)") else Response.Write("(NYSE: MU)") end if %>
and MICRON ELECTRONICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MUEI)") else Response.Write("(Nasdaq: MUEI)") end if %> (45 min. each)
(402) 351-9984 -- replay from 9PM EST on 3/17 through midnight on 3/18

03/18/97 (Tuesday)
ROSS STORES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ROST)") else Response.Write("(Nasdaq: ROST)") end if %>
(402) 222-9948 -- replay available through 3/25

FOOL PORTFOLIO STOCKS

FOOL PORTFOLIO               BORING PORTFOLIO
ATCT down $1/4 at $7 1/4     ATLS unch. at $23 1/2
AOL down $1 3/4 at $42       BGP down $5/8 at $41 3/8
CHV down $5/8 at $66 3/4     CSL unch. at $31 7/8
COMS down $11/16 at $33 5/8  CSCO down $13/16 at $49 3/4  
GM down $3/8 at $57 5/8      GNT down $1 1/2 at $35 5/8
IOM down $1/8 at $14 1/2     ORCL down $5/8 at $40 5/8
KLAC down $2 1/4 at $37 1/2  XHP up $5/16 at $64 1/4
LU down $1 3/4 at $51 3/8    PMSI  unch. at $11 1/8
MMM down $5/8 at $89 1/8     SLR down $1 at $47 3/4
T down $1/16 at $35 9/16     TDW down $7/8 at $43 7/8