METRICOM - Wireless Data Communications Message Board

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Technology Stocks : METRICOM - Wireless Data Communications

MCOM 0.00450

-10.0%

Nov 7 9:30 AM EST

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To: Henry Eichorszt who wrote (1128)	7/2/1999 7:26:00 PM
From: Keith Lenart	Read Replies (3) of 3376

Caveat Emptor to anyone buying MCOM at these price levels for anything other than a short-term trade.... Some simple facts: MCOM has never made a profit since going public in 1992. Revenue growth has been erratic and look at the disturbing Net Income trend. Year Revenue Net Income ---- ------- ---------- 1993 10.1M -6.1M 1994 21.6M -11.7M 1995 5.8M -23.5M 1996 7.2M -39.3M 1997 13.4M -59.3M 1998 15.9M -84.2M Before the $600M cash infusion, MCOM was headed down a path towards bankruptcy with only $21M in cash (not enough to even cover operations through the end of 1999) and a book value of -$2.95/share! So say ye, the $600M is a godsend then, right? Well, only sort of.... It does allow MCOM to continue losing money (uh, I mean operating), but also brings along an extra 60M shares of dilution to the party -- bringing the total to somewhere around 79M. That means that at today's closing price of 27 7/8, MCOM has a market capitalization of $2.2B (that's 'B' as in 'Billion'), which by the way happens to be a paltry 138x total revenues for 1998. MCOM may be a good hold someday, but I wouldn't hold my breath (or the stock) until they can prove they're capable of making, first any and then, a consistent profit. Paul Allen and MCI have a decent enough investment on their hands, buying MCOM preferred for $10 and holding for the long haul. But, retail investors buying today's common at $28 do not. All JMHO. Your mileage may vary.

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