The Vancouver Sun from Vancouver, British Columbia, Canada • 46

D2 THE VANCOUVER SUN, SATURDAY. OCTOBER 16. 1999 BUSINESS Pessimistic Bid.Com forecast vindicated Barbara Aarsteinsen AIRLINES from Dl Support first pledge made in public view different carriers but it's not good for ourselves or Air Canada." Benson made the remarks after Air Canada's allies in the Star Alliance network pledged financial support to help fight off a hostile takeover bid from Onex Corp. "We stand together in full support and will take whatever steps necessary, including making a financial commitment, to protect the interest of our partnership and its customers," Jan Stenberg, president of Scandinavian Airlines System, said on behalf of Star Alliance leaders. The pledge came at a ceremony welcoming All Nippon Airways into the alliance and the announcement that Singapore Airlines will join next year.

ilar pressure? How many bend and how many break? No wonder stock exchanges across the country have formed a joint committee to investigate the practices and activities of brokerage house analysts. The 10-member committee is expected to come up with national guidelines and beat the drum for for Canada-wide standards. We all turn to analysts journalists and investors. But let this be a reminder that you're dealing with considered opinion at best, not gospel. Do research of your own and compare analysts' reports.

If a particular analysis strikes you or sways you, ask your broker about his firm's underwriting involvement. It doesn't mean you should rule an investment out if a firm is recommending a company with which it has a financing relationship. But it's another piece of information you might want to throw into the evaluation process. And in that saga is a cautionary tale for investors. There's supposed to be a so-called Chinese wall separating analysts from their corporate finance colleagues.

But theory and practice are two different things, and that wall has holes and cracks. After all, when was the last time you ever saw a "sell" recommendation. "Buys," "strong buys," "speculative buys," "ac-cumulates" and "holds" abound; there are "neutrals," but how many times are investors urged to dump, dump fast, or run for the hills? Pavan ran into flak fast with his thumbs-down which came out just days after Bid.com was listed on Nasdaq. The company's stock started tumbling immediately (though it later recovered, only to subsequently fall again in later months) and the you-know-what came raining down from all sides. Yorkton, by the way, had raised $9.5 million in BkLCom's first private placement of special warrants in October 1997, and had then led two other financings.

"I'm getting death threats," Pavan told one newspaper back in April. "Somebody has called and threatened to come to my house and kill me. These guys aren't serious. But it tells me I'm so right." Meanwhile, Bid.Com vice-president Greg Bewsh was quoted as saying that "it's unheard of that a company does an underwriting, then the analyst they have slams the stock. I have never heard of that being done.

Ever." In September surprise, surprise Bid. Com then turned to Vancouver-based Canaccord Capital Corp. to handle a $25-million warrant offering. (In the end, that deal raised $17.1 million, with the Internet company blaming the shortfall on the decline in its share price). Now, it's comforting that Pavan stuck to his guns and York-ton backed him up.

But it's disturbing to see the criticism he faced and it's three-bell alarm scary to see the expectations that Bid.Com had. How many analysts face sim If I were Mark Pavan, I'd be in a good mood this week. Indeed, I'd probably be gloating. The Toronto-based Yorkton Securities analyst made head-, lines last spring when he released a negative report on high-flying Bid.Com International describing the stock as overvalued and issuing an "underperform" recommendation. Investors were outraged at his evaluation of the Internet darling and Mississauga-based Bid.Com, Canada's largest online auctioneer, marched off and found itself another investment banker.

This week, however, Pavan's pessimistic outlook was vindicated in many quarters when Bid.Com warned that its third-quarter and full-year results will fall short of forecasts. Citing problems with forming partnerships and signing licensing contracts, the company said Wednesday that its third-quarter revenue will be $8.25 million to $8.5 million a good sight sort of its earlier target of $12 million. WIC from Dl THE MARKETS Citing various problems, the company says that its third-quarter revenue will be a good deal short of its target Moreover, revenue for the year will be in the range of $30 million some $20 million off earlier forecasts. In the wake of the news, Bid.Com shares fell 60 cents to $7. On Thursday, they lost another 10 cents and on Friday they fell 25 cents.

At $6.65, the stock is far below its April 27 high of $33.65. BCTV from Dl CRUISE from Dl CRTC mulls hearing delay Industry confident new racilities possible Plans kept close to vest lapsed because of tax implications and Shaw and CanWest have been negotiating new terms ever since. The companies announced Friday they expect to have a final agreement signed and in effect by Nov. 1. The deal still needs regulatory and other approvals.

The companies have also asked the CRTC to suspend a hearing originally called to examine Shaw's takeover of WIC in a complex 1998 deal that left CanWest as a disgruntled minority WIC shareholder. The hearing is scheduled for the end of the month and the companies want it delayed until after Dec. 1, when they will all file applications to the federal regulator. The CRTC said if it sees a nal deal by Nov. 1 and the two broadcasters file applications by it will consider de-.

laying the hearing until next April. In that case, a ruling wouldn't be likely until late sum- mer or early fall of 2000. Shaw and CanWest noted the make and I do not want to disclose what our thinking is on this," Strike said in an interview Friday, after Winnipeg-based CanWest and Calgary-based Shaw Communications announced they had reached an agreement on how to split WIC's assets. Strike said the agreement, with the acquisition of four Alberta stations, provides CanWest with a "national broadcasting position." There has been speculation that CanWest would attempt to sell BCTV, possibly CHEK in Victoria, and CFCF in Montreal to CTV. BCTV and CFCF are already CTV affiliates, which would make them in the spring of 1998, but a deadlock developed because rival CanWest owned 46 per cent, WIC has been cutting costs, and jobs while it waited for Shaw, can west uloDal and tdmontons Allard family, which also owns part of WIC, to negotiate the division of its assets.

The company has been in limbo as the takeover process dragged on. Even with Friday's deal, there are still a number of hurdles for the two broadcasters, not the least of which is gaining CRTC approval. Another analyst, who asked to be named, said he expects the CRTC will demand some assets be sold to keep all markets competitive. That could also give another broadcaster the opportunity to i deal is also subject to a tax rul- I ing from Revenue Canada, and I CRTC procedural approvals. a good fit.

That scenario could result in CTV attempting to sell VTV. Possible buyers are Toronto-based CHUM, Winnipeg-based Craig Broadcasting or B.C. billionaire Jimmy Pattison. WIC Television president and chief executive officer Art Reitmayer said what Can-West would do if it owns two stations in Vancouver probably has not been decided. "What will happen ultimately to any of the stations is subject to discussion." He said that issue will have to be worked out after talks between the CRTC and Can-West.

move into new locations, he said. CanWest already has in Ontario; Quebec and B.C, and will gain more stations in those provinces from WIC. The regulator could force CanWest to sell some stations if it feels the acquisitions would give consumers less choice in certain markets. "There's many of question marks with that," the analyst said. The issues the federal regulator will consider include competition, the size of the transaction and the involvement of WIC and Shaw in a broad range of broadcasting sectors such as radio, TV and pay and specialty channels.

The regulator will also look at whether Shaw's dominance as Canada's No. 2 cable TV opera- tor as well its ownership of major broadcasting properties will undermine consumer choice in any way. While widely anticipated, this is the first time Star Alliance has publicly committed financial support. The heated takeover fight has turned into a scrap between the two global airline associations, with neither side prepared to concede Canada's routes and vital connections to Asia. "The thought of Air Canada disappearing from that alliance clearly has the other members somewhat concerned, for good reason," HSBC Securities airline analyst Ted Larkin said.

Analysts have said neither airline alliance wants to lose its Canadian member because of the revenue generated for alliance partners. United gets about $200 million US annually as a result of Air Canada's membership, while Lufthansa gets about $100 million US. American Airlines, meanwhile, gets about $120 million US from Canadian because of its membership in Oneworld. Benson said he thinks a new offer could soon emerge as an alternative to the Onex bid. "My speculation would be that we haven't seen the last of the offers," he said.

"I think something is going to happen in the next couple of weeks that will likely spark a response from somebody else. You may seem Onex with some fresh ideas and some fresh thoughts and you may see others as well." Air Canada's board of directors is believed to be meeting this weekend to put the finishing touches on a long-awaited alternative to Onex's restructuring proposal. The plan will likely include participation from some of its Star Alliance partners. light rail industry BUSINESS LETTERS rail system would be cheaper to install and operate, while a Ballard-powered bus system would only cost more to operate. Why is the light-rail industry, the true test in providing cheaper public transit, ignored by Ballard? The real test for Ballard is not buses but LRT, and until we see it don't believe it! Malcolm Johnston, chair, the Light Rail fur Vancouver Committee, Delta Letters must contain author's name, address and a daytime telephone number.

Maximum length is 250 words. We reserve the right to edit, condense or reject any contribution. E-mail (no attachments): sunlettersepacpress.80utham.ca Post: Business Editor, The Vancouver Sun, Suite 1-200 Granville Vancouver V6C3N3 Business department telephone: (604) 605-2520 "1.1 ilJftflKEff ADMINISTRATION Regardless of whether new convention centre project gets off the ground, new ship berths are likely. have additional cruise-ship berths, Morris said the industry is confident new docking facilities will be built. "That will be done, with or without the convention centre." Travel analyst Richard Skinner said Vancouver benefited from the war in Kosovo which produced a daily barrage of televised scenes of carnage and desperate refugees.

"Whenever there is any kind of a problem in Europe, Alaska is kind of a counter-balancing market as far as where people wfll gq," Slqriner said from the Seattle offices of Skinner, Dun- lap and Stevens. "It happened before when Libyan president Moammar Gadhafi was doing the same kind of things in the 1980s." in Vancouver has also benefited from the increased capacity cruise ship companies brought on to the market at a record-breaking rate in 1999. "It is the old story. Build it and they will come," Skinner said. "New ships with new facilities attract new customers." Next year, however, supply could exceed demand, and if discounted fares appear in January and February and stay on the market, it will be a good indication the industry has overbuilt, Skinner said.

However, he noted that the industry is enjoying record profits and customer satisfaction. "The industry continues to report very high passenger satisfaction rates," he said. "It has the highest customer satisfaction rate of any leisure MAHOGANY BUUNOSED EXECUTIVE SUITES INC. vacation product." Skinner expects the Vancouver industry will continue to grow in 2000, but not as rapidly as it did this season. New wrinkles available to cruise consumers in 2000 will include the Royal Caribbean Cruise Line's two-, three- and four-day mini cruises out of Seattle aboard the Vision of the Sea, which will stop at Vancouver and Victoria.

Looking further ahead, the Delta Queen Steam Boat Lines, known mostly for its famous Mississippi River cruises, will be offering smaller, 300-passen-ger ships which will venture into ports not accessible to larg er vessels, probably beginning in onni The itinerary, which could in clude stops at Vancouver, Victoria, Campbell River and Port Hardy among others, would appeal to vacationers who want to visit more out-of-the-way locations. Beyond the obvious benefits to Vancouver's taxis, restaurants and hotels the cruise ship boom has boosted employment for longshoremen and trades involved in vessel repair and maintenance. TSI Terminal Systems Inc, says the industry provided an estimated 130,000 hours of work in 1999, compared with 126,907. Ballard ignoring The continuing Ballard fuel-cell issue is confusing. Why just fuel-cell powered buses? Ballard-powered buses, costing about $850,000 each, will just increase the cost of transit.

What about Ballard-powered light rail vehicles? The cost of a modern three-section articulated light-rail ve hicle is about $4.5 million. A Ballard-powered LRV would do away with the additional expensive overhead wires, thus making light-rail transit cheaper to build. Added to the fact that a three-section articulated LRV can do the work of about eight buses costing $6.8 million. Wages account for about 70 per cent of the operating costs of a transit system and every bus or tram operated means you must hire at least five people to operate, maintain, and manage them. It's easy to see that a Ballard-powered light- U- FILE 100 FACULTY OF COMMERCE BUSINESS "THE FINEST OFFICE AUCTION IN HUGE OFFICE BANKRUPTCY One analyst called the deal "fragile" since so much depends on decisions by the CRTC.

The CanWest and Shaw deal comes after the companies have been duking it out in the boardroom since the spring of 1998 as they tried to figure out how they would split WIC's radio and TV operations. Industry watchers were beginning to wonder if there would be a deal since the companies have been suggesting for months an agreement was close. Shaw gained 52 per cent of WIC in a fierce takeover battle A nu looking for a tuperior-quality MBA program. I not Killing to travel tut unwilling to put my carter on hold. The VnivenityofWaihington EMBA Program wai a perfect match, lit very challenging to purtue a career and a graduate degree liinultaneously, but the value it immediate and tignificant.

Riy Ucckni Buiiinu OptrMimn Minagir luttl CcifwaliM UW EMBA 2000 Jmu not UPON BAIL1KF AND TKUSTHE ORDLRS. ABLE AUCHONS.COM WILL SELL BY WAY OF UNRESERVED PUBLIC AUCTION, THE ENTIRE ASSETS OF A MAJOR. HIGH END BUSINESS PARK. THIS IS A VERY RARE OPPORTUNITY TO PURCHASE LARGE MATCHING MAHOGANY SUITES IN NEAR NEW CONDITION. Time: Wednesday, October 1 1:00 AM Plice: 1629 Main SlH Vancouver, B.C.

12 block wuth of Terminal Preview: Tuesday, Oct 26, Noon to 6:00 PM si Visit oar wb lilt at for pictures, descriptions and prebldding on every item. Available after Oct 18. OFFICE FURNISHINGS: 50 SHAPED, L-SHAPED AND DP. DESKS -45 MAHOGANY BULLNOSED2 DRW LATERAL i b'x CABINETS MAHOGANY BOARDROOM AND CONFERENCE TABLES MAHOGANY FRAMED BOARDROOM CHAIRS OVER 500 CHAIRS INC. MORE THAN 150 MAHOGANY FRAMED CLIENT CHAIRS 50 BLACK LEATHER GAS LIFT HKiHBACK CHAIRS OVER 100 NEW TOP QUALITY GAS LIFT ERGONOMICTASK CHAIRS -12 KIMBALL MODULAR CORNER WORKSTATIONSIONLY 2 YEARS OLD, nLECABINFTSIW.I2GREYSTEEU'ASE5DRWLTlJlUS.PLUSU4AND5DIOVVER mm TK'ALS AND 2J AND 4 DRW LATERALS MOBILE FILE PEDESTALS NEW STEELCASE ELLIPSE COMPUTER WORKSTATIONS RECEPTION STATIONS BOARDROOM TABLES PLANTS HUGE QTY.

OF CORPORATE ARTWORK OVER AND CHAIRS LRO. OTY. OF 50 FLOOR MATS BOOKSHELVES STATIONERY AND EQUIPMENT RAC KING BOARD- ROOM MOBILE AV STANDS LEATHER MULTI MEDIA TABLE WHITEBOARDS EASELS WALL MOUNT STORAGE CABINETS STACKING CHAIRS AND MUCH MUCH 'BusinessManagement Skills "it- lrfl" i uumi Hi 1 1 1 it OFFICE EQUIPMENT: 3 NETWORK SERVERS COMPAQ PROLIANT PRO 3000 PII 450 Ml IZ WITH 128 MEG RAM -COMPAQ PROLIANT PII HO WITH 64 MEG RAM PENTIl IM PRO SERVER WITH 2 200 MHZ PROCESSORS, 64 MEG RAM AND 27GKi HARD DRIVE 12 PENTIUM 133 SYSTEMS WITH BUILT IN SPEAKERS AND HEWLETT PACKARD 600 DESKJET PRINTERS NOTEB(X)K COMPUTERS LASER PRINTERS XEROX PLAIN PAPER PLOTTER 10 PHOTOCOPIERS INC. FULL LOADED MITA DC 3060 COPIER WIIM (ONLY 40 000 COPIES) CANON AND MINOLTA COPIERS 3 LASER FAX MACHINES PHONE SYSTEMS BOARDROOM A EQUIPMENT AND Ml ICH MUCH Entrepreneurship Planning to start your own business? Then learn the basics that will help you succeed. This three-day course will help you get your business idea off on the right track.

You'll learn how to assess the market potential for your business, perform costprofit analysis, and bring your idea from the drawing board to the marketplace. Course IDf D620A-19993-302 Tuesdays, Nov 2-16, 7-10pm David lam Campus, 1250 Pinetree Way, Coquitlam. Call 527-5472 to register or 527-5607 for more information. WE BUY FACTORIES OFFICES INVENTORY FORW lie uctions 521 -ABLE www.ableauctions.com Douglas College bu con go onywheit from heit i i i i.iHi' ViViV JL mi ir.