AOL Time Warner Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

AOL investor Fred Grant was surprised and disappointed by January 10, 2000 Announcement of the merger of AOL Time Warner. He was fortunate enough to buy AOL at $ 40 in October 1999, shortly before the rapid growth shares to $ 95 in mid-December. Although a few days before the announcement of the merger of stock settled at $ 73, up to February 2, 2000, he suffered another decline - to $ 57 per share. While many observers talked in glowing terms tremendous interaction between the premier content Time Warner, advertising and cable distribution channels and online brands AOL, marketing savvy, and customer base, analysts predicted that the growth of the combined company will be 15% - 20% range , one-half of what it had expected AOL Grant holdings. Analysts also warned the management and execution risks associated with huge and unprecedented combination of Internet and traditional media companies. Finally, Grant was concerned about the impact of AOL Time Warner to buy, rather than combining the accounting treatment of the transaction. Why not a union company accounting, and other companies for large transactions, such as stocks and NationsBank-BankAmerica Travelers-Citicorp? Have a chilling effect on the good will hurt profit market value of the new company? As Grant watched his AOL shares slide in the days following the announcement of the merger, he wondered whether he should sell his shares or, as some analysts have suggested, to use these new lows, as a buying opportunity. "Hide
by Mary E. Burt, Hilary Stockton Source: Stanford Graduate School of Business 39 pages. Publication Date: February 1, 2000. Prod. #: A171-PDF-ENG