Most companies will have to enhance the power of their existing asset base through acquisitions, partnerships, or licensing.
"General Electric is only adding about 4percenttotheirexistingting asset base, so this is not a major event for them," said Tom Burnett, president of Merger Insight, a subsidiary of Wall Street Access, an independent New York Stock Exchange brokerage house.
Market expectations are for the company to report a loss of $0.06 per share in Q1, driven by a decrease in revenue, lower shipments, decrease in price realization, and higher expenditure to improve the existing asset base.
Before Walgreens API-enabled their photo printing infrastructure there was no connection between digital picture services and commercial photo printing infrastructure – with the app Walgreen have brought entirely new revenue streams to an existing asset base.
Similarly, cell tower REITs like American Tower (AMT) and Crown Castle (CCI) would likely benefit from that fact that rising steel prices make it costlier to build new towers, making their massive existing asset bases (for which demand continues to grow at a strong pace) more valuable to tenants.
And, as Morgan Stanley has pointed out, without proper quantitative easing its existing asset purchase and lending initiatives will leave it more than €500bn adrift from that target.
Mr. Webb, a former investment banker, contends that Pacific Century should have a market value of about $7.5 billion, based on its existing assets and the anticipated future profits from its Internet-access service.
Yet it continues to make questionable acquisitions, given its existing assets and debt ($18 billion at the end of 2004, before it bought Sibneft).
It may be that better managing its existing assets would be the best place for Mr. Eisner to put his energies.
