Stock Watch: Wall Street Cheers Compaq/CMGI Deal
06/30/99 12:00 AM PT
After the dust settled on Tuesday, it looks like Wall Street was rather pleased with CMGI's acquisition of an 83 percent stake of Compaq's AltaVista search engine and related properties. Shares of CMGI soared 12-5/8 to 110-5/16 on Tuesday, while Compaq stock climbed 1-1/16 to 23-3/8.
It really looks like everybody could win from this deal. AltaVista's eyeballs should greatly add value to CMGI's Internet properties, and the new exposure could help some of these companies go public. That, in turn, would boost CMGI's stock price and the value of Compaq's stake in CMGI. Often when an acquisition is made, the buyer's stock price suffers. Sometimes, the seller's stock price suffers. With this deal, everybody gained on the day the deal was announced -- and that seemed to make perfect sense.