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Inside Wall Street
IS INTUIT'S BAD KARMA ENDING?
After a series of unlucky breaks, Intuit (INTU)--whose shares tumbled from 891/4 in early November to 49 on Mar. 19--may give investors wonderful news: buyout talk, to be more precise.
This maker of personal-finance and small-business accounting software has suffered severe blows since last May, when Microsoft withdrew its offer (made in October, 1994, when the stock was at 55) to buy the company for $114 a share. The offer had lofted Intuit into the 80s, but it plunged to 57 when the deal was pulled. And just when the stock started to perk up, to 67, it got nailed again: On Mar. 1, it warned that earnings would be little changed in the second half of its fiscal year ending July 31, 1996. That sent the stock to 501/2. Then, on Mar. 18, Microsoft unveiled plans for providing Internet hookups between consumers and banks--challenging Intuit in online banking. The stock again reeled--falling to 481/2.
No matter, say investors who are suddenly bullish on Intuit. They are convinced that a major designer of standardized software, with revenues of $2.5 billion, is seeking to buy Intuit at 65 to 70 a share. This company's integrated software is used on systems produced by IBM, Digital Equipment, and Hewlett-Packard, among others.
Intuit's software would provide a useful fit with the buyer's software line, says one New York investment manager. And with the potential buyer's deep pockets and market penetration, Intuit would be able to battle Microsoft's incursion into its turf, says this pro. A spokeswoman for Intuit says it isn't for sale.BY GENE G. MARCIAL