Total Sports closed its sale to Quokka Sports for
"close to" $34M in stock, according to Christina Dyrness of
the Raleigh NEWS & OBSERVER. Quokka issued 15 million
shares of stock to acquire Total, and when the deal was
first announced in July, those shares were worth around
$132M, "or almost four times their value" yesterday. Since
July, shares of Quokka have dropped from $8.81 to $2.25
yesterday. Total Sports interim CEO Gary Stevenson "played
down the shrunken value of the sale," saying, "It's not like
Total Sports and Quokka are the only companies whose
valuation has been trimmed." A Total Sports BOD member
since the company was founded, Stevenson will receive 8-11%
of the Quokka stock "for his part in putting together the
merger." Dyrness: "It will be difficult for Total Sports
investors to make money on the deal unless Quokka's stock
recovers, but officials involved say the combined company
will have the strength to do so." Robertson Stephens
analyst Michael Cibula downgraded Quokka's stock from "buy"
to "long-term attractive" two weeks ago, saying that
investors want to see "more" from Quokka. Prudential
Securities analyst Bill Lerner has a 12-month target of $10
per share on the stock and said that the Total Sports deal
was "a great deal" for Quokka. Jefferies & Co. analyst
Louis Amoroso has an $8 target (NEWS & OBSERVER, 11/15).
