BUFFETT AND OTHERS INVEST $500M IN LEVEL 3
Billionaire Warren Buffett and two other investors have agreed to invest a total of $500 million in Level 3 Communications Inc. to help it fund acquisitions as the telecommunications industry consolidates. Legg Mason Inc. and Buffett's Berkshire Hathaway Inc. each agreed to buy $100 million and Longleaf Partners Funds agreed buy $300 million in notes that will mature in 10 years and pay 9 percent cash interest. The notes can be converted into stock at a price of $3.41 per share. "It is widely recognized that the telecommunications industry is going through a period of unprecedented turmoil," said James Q. Crowe, Level 3's chief executive officer. "At the same time, however, the ongoing shakeout is creating extraordinary opportunities, as telecommunications companies, their network assets and customer bases become available." Buffett, who largely has shunned Internet stocks while others rode the roller coaster of the dot-com era, said, "Level 3 is well equipped to seize important opportunities that are likely to develop in the communications industry."
WORLD CUP SCORES ONLINE IN HONG KONG
World Cup fever gripped Hong Kong online in June as almost 20 percent of all at-home Internet users logged onto the official FIFA Web sites -- either fifaworldcup.yahoo.com or hk.fifaworldcup.yahoo.com -- according to Nielsen/NetRatings. The highest daily traffic to the two sites -- 58,128 unique at-home users -- was recorded on June 15, coinciding with the Germany vs. Paraguay and Denmark vs. England matches. In June, the total Hong Kong audience to the English site was 193,400, while the Chinese site attracted a total audience of 309,500. While the audience of both site declined towards the end of the tournament, the Chinese site experienced more sustained traffic. "Traffic to the official FIFA World Cup site was generally higher during the preliminary stages of the tournament, leading up to the quarterfinals, after which it declined," said Peter Steyn, director of sales and marketing for Nielsen/NetRatings in Hong Kong. "This suggests that users looked to the Internet not to replace TV, but to supplement it with reminders about fixtures, team news and player statistics, particularly while the tournament features several games per day."
EBAY INC. BUYS PAYPAL FOR $1.5B
Online auctioneer eBay Inc. said it has reached an agreement to acquire PayPal Inc. in a stock deal valued at approximately $1.5 billion. EBay said it will exchange 0.39 eBay shares for each share of PayPal, of Mountain View, Calif. The deal values PayPal at about $23.61 a share based on eBay's closing Nasdaq stock price on Friday of $60.55. PayPal, which went public in February, closed Friday at $20 a share. The deal is subject to various stockholder, government and regulatory approvals and is expected to close around year-end 2002. Meg Whitman, president and chief executive officer of eBay, said, "EBay and PayPal have complementary missions. We both empower people to buy and sell online. Together we can improve the user experience and make online trading more compelling. We can also capture greater value from the e-commerce opportunities occurring both on and off our site." Peter Thiel, chief executive officer of PayPal, said, "EBay and PayPal have built vibrant user networks on the Internet. The beauty of this deal is that it will allow us to offer our communities new tools and added flexibility to do more business. Integrating our services is a win-win situation for millions of current and future online consumers."
PayPal, which will continue to operate as an independent brand, is a leading online payments solution. Approximately 60 percent of PayPal's business takes place on eBay, the remaining 40 percent occurs primarily among small merchants who constitute a potential new audience for eBay. EBay said its current payment service, eBay Payments by Billpoint, will be phased out after the close of the transaction. EBay also reported second-quarter pro forma earnings of 19 cents a share and revenue of $266 million, above the average forecast by Thomson Financial/First Call of 17 cents and $264.3 million. The online auctioneer attributed the better-than-expected results to acceleration of its U.S. transaction business. EBay's complete second-quarter earnings results are to be announced July 18.
TELECOM JOB LOSSES AT RECORD PACE
Nearly 166,000 jobs have disappeared in the troubled telecom sector since January -- more than one of every four job cuts announced since January, according to the international outplacement firm Challenger, Gray & Christmas. But job losses slowed in other technology-related industries such as electronics, computers and e-commerce from year-ago levels. So far this year, telecommunications companies have announced 165,840 job cuts, compared to 130,442 layoffs in the first six months of 2001. The industry chopped a total of 317,777 workers last year. "Even with overall job cuts falling from the record pace of 2001, telecommunications continues to surprise us month after month with significant job-cut numbers," said John A. Challenger, the firm's chief executive officer. "The fact that telecom downsizing is on track to beat last year's total really tells where this industry is headed." The Chicago outplacement firm monitors corporate job losses on a daily basis. Technology companies have been in a slowdown since the bursting of the Internet bubble and have cut 243,000 jobs through June, about one-third of all jobs lost this year. However, that number is down 23 percent from the 313,939 tech industry cuts during the first half of 2001. Computer firms trimmed 42,186 jobs in the second quarter, bringing the year-to-date toll to 55,398, but e-commerce firms only eliminated 1,741 jobs, 96 percent fewer than the 49,593 jobs lost in the first six months of last year.
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