News tipped for stake in Net group Author: By KATRINA NICHOLAS Date: 19/01/2000 InvestorWeb is expected to announce an alliance with a blue-chip media company by the end of the week news which may help explain the online financial services player's recent meteoric share price rise. News Corp is tipped to be the partner and is expected to take a 20 per cent stake in InvestorWeb, a deal worth $15 million. A report from broker Merrill Lynch confirmed an impending alliance and said InvestorWeb would make a number of ``small but very EPS positive" acquisitions in the near future. The report also said the group's shares could climb as high as $1.50 and that better than expected interim results would be released later in the month. After a modest debut at 22c on the sharemarket last September, shares in InvestorWeb took off in November to touch a high of $1.29 last Thursday. The shares yesterday rose 4c to $1.28. CPS Capital Group ( www.cpscapital.com.au ) internet analyst Mr Tony Cunningham said an alliance with News Corp would be ``very positive" for the stock and could easily push the shares to $2. ``Everyone has been waiting for News Corp to invest in the Australian internet market and as far as I can tell, this would be their first entry," Mr. Cunningham said. Given News Corp's investment history, Mr. Cunningham also said it was unlikely the media giant's stake would be a passive one. InvestorWeb, which raised $10.2 million when it went public last year, has three main areas of operation: a financial services Web site; a financial software development arm; and Investors Mutual, a funds management operation which was acquired last May for $4 million in shares. Investors Mutual was founded by former head of Australian equities for Perpetual Funds Management, Mr. Anton Tagliaferro, and InvestorWeb founder and managing director's Mr Otto Buttula. Mr. Buttula declined to comment on the possible media alliance. Last financial year InvestorWeb reported net profit of $310,000 on revenue of $1.8 million. This year, profit is expected to climb to $1.4 million on revenue of $6.2 million. However, Merrill Lynch is predicting profit will be $2 million on revenue of $7 million. Broker Burdett Buckeridge Young is also positive, rating InvestorWeb as a speculative buy.