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We can discuss and decide over the break.
Best, Jeff "Mark Guinney" <Mark_Guinney@watsonwyatt.com< 03/14/2001 09:35 AM To: "Vavrek; Carolyn (US - San Francisco)" <cvavrek@deloitte.com<, "vavrek@haas.berkeley.edu" <vavrek@haas.berkeley.edu<, "sama@haas.berkeley.edu" <sama@haas.berkeley.edu<, "jdasovic@enron.com" <jdasovic@enron.com< cc: Subject: Re:RE: Group Project Anil, Questions for you: Is Zircom in an easily definable industry so we can make comparable studies and valuations? Is their much public history of the firm? Will such an acquisition have a significant influence on Intel's earnings (my guess is no since Zircom's latest annual revenue was only $500 million versus Intel's $20+ billion revenue)? Can we make reasonable future estimates of Zircom's financial statements and business lines? I, for one, have little knowledge or confidence in myself of analyzing a tech company. Given the fact that Anil is the only person in the industry from our group we would be heavily reliant on him to give us strategic insight on the companies and their businesses. My preference- an industry that is relatively more stable and simple for all of us to understand. While we don't have to do Amazon specifically, I would like an industry or company that won't require an immersion of readings just to understand the product, sales distribution, clients, distributors, etc. Remember, we have to make guestimates about the future of the industry and predict sales, costs, etc. The nice thing about Amazon (or a similar company) is that it is merely an Internet twist on an industry with a very long history and an easy to understand business model. Webvan could be another example. Another idea: Trying to value Fidelity Investments- a private company. The nice thing about this exercise is that there is a lot of data on comparable companies (T. Rowe Price, Zurich Scudder, Franklin Templeton) and some public information on Fidelity. A good portion of our valuation would be based on assumptions which means that as long as we can support our assumptions we can't be wrong. ********************************************** Mark D. Guinney, CFA Consultant Watson Wyatt Investment Consulting 345 California Street, Ste. 1400 San Francisco, CA 94104 (415) 733-4487 ph. (415) 733-4190 fax ____________________Reply Separator____________________ Subject: RE: Group Project Author: cvavrek@deloitte.com (Vavrek; Carolyn (US - San Francisco)) Date: 03/14/2001 1:03 PM My vote is for analyzing the Intel purchase because we have access to some inside info, Anil is well versed in this industry (I assume) so we could do some good comps analysis and it seems like the right size case for us. We could easily send Sarah the link Anil sent us and say that we are going to analyze this acquisition. I am also open to the Amazon analysis, although I am not as excited about analyzing such a popular issue. Carolyn M. Vavrek Manager - Human Capital Advisory Services Deloitte & Touche 50 Fremont Street San Francisco, CA 94105 phone: 415-783-5137 fax: 415-783-8760 e-mail: cvavrek@deloitte.com -----Original Message----- From: Mark Guinney [mailto:Mark_Guinney@watsonwyatt.com] Sent: Tuesday, March 13, 2001 5:11 PM To: vavrek@haas.berkeley.edu; sama@haas.berkeley.edu; jdasovic@enron.com Subject: Group Project I was just brainstorming on potential projects. I thought that an interesting and fairly relevant topic could be a current evaluation of Amazon.com and how the projected revenues & profits relate to the current stock price. We could also provide some historical perspective on all realistic Amazon's stock price was a year or two ago relative to a discounted cash flow. I can fairly easily get my hands on some Wall Street analyst research reports that could provide us with some insights and hints as to what Wall Street is expecting. Most of our time can be spent creating a discounted cash flow model similar to what we have been doing in class. Since the jury is still out on Amazon's business model, I think it would make for some interesting debate in class when we present our model. ********************************************** Mark D. Guinney, CFA Consultant Watson Wyatt Investment Consulting 345 California Street, Ste. 1400 San Francisco, CA 94104 (415) 733-4487 ph. (415) 733-4190 fax This message (including any attachments) contains confidential information intended for a specific individual and purpose, and is protected by law. If you are not the intended recipient, you should delete this message and are hereby notified that any disclosure, copying, or distribution of this message, or the taking of any action based on it, is strictly prohibited.
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