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April 14, 1999 RECOMMENDATION: BUY ACTV, Inc. (NASDAQ: IATV) Liberty Increases Investment In ACTV Receives Options to Invest an Additional $100 Million over 5 Years; Gives ACTV Strong Financing Plan, Raises Profile of ACTVs Internet Assets
Research Update ACTV and Liberty Media Group (NYSE: LMGa and LMGb) announced yesterday that the parties had reached an agreement whereby Liberty will invest an additional $9 million in ACTV (through the exercise of previously existing options and the purchase of new shares), and Liberty will receive options to purchase additional interests in ACTV over the next one-to-five years. If fully exercised, these investments will total more than $100 million and Liberty could end up owning approximately 25% of ACTV. We believe this expanded investment reflects Libertys commitment to the commercialization of the HyperTV and Individualized Television technologies, and ensures that ACTVs patented interactive applications will be integrated into the vast operations in which Liberty has an ownership interest. We reiterate our BUY recommendation. As part of this transaction, Liberty Media receives a series of options that allows them to make additional equity investments over the next five years. Exercise of the options over the next 24 months would result in investments of approximately $50 million. Liberty must exercise each option sequentially, or the remaining options expire.
Positive aspects of the new ACTV/Liberty Media Partnership
Risk Considerations This section of the document is provided to remind potential investors to undertake a prudent level of due diligence prior to making an investment in the securities of ACTV, Inc. For a complete description of risks and uncertainties to ACTVs business, see the "Risk Factors" section in ACTVs SEC filings, which can be accessed directly from the SEC Edgar filings at www.SEC.gov on the Internet. Other potential risks include:
For Additional Information Please visit our website at www.SmallCapsOnline.com for copies of our earlier research reports on ACTV, Inc. Contact SmallCaps Online LLC 212-554-4158 Sources for Additional Information The following are website addresses offering related information, and links to other sources of information. www.ACTV.com ACTVs corporate website www.SmallCapsOnline.com SmallCaps Onlines site for company information and research www.FCC.gov Federal Communications Commission homepage (information on digital TV) www.NAB.org National Association of Broadcasters homepage www.TCI.com Tele-Communications, Inc.s homepage www.skyconnect.com Skyconnects homepage www.GI.com General Instrument Corporations homepage www.Scientific-Atlanta.com Scientific-Atlantas homepage www.pbs.org/insidepbs/dtv Public Broadcasting System digital television information www.SEC.gov U.S. Securities and Exchange Commission, with links to EDGAR filings
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