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Technology Stocks : Superwire.com (SUPW) a new contender among broadband ISP s
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To: Paul Body who wrote (13)7/14/1999 10:23:00 PM
From: Goodboy  Read Replies (1) of 26
 
I don't agree Paul. You will see little institutional interest while this remains a bulletin board company with no Q's or K's. That will change in the coming months. In addition, they will go live with several of the Manhattan buildings by end of summer and many more during the fall. This will increase their profile in a big way. I don't know which will happen first, Entrata geting large orders or Superwire getting critical mass by rolling out multiple buildings. In 2 to 3 months, this company will not be hidden. I would think that institutional interest would come from the company's ongoing and future needs for capital. Hopefully they will dillute curent shareholders wisely.

For the record, giving $70 in stock for a subscriber is like trading an ounce of copper for an ounce of gold. It is not even worth comparing how the market values an @Home sub to what that would mean for Superwire's future market value. What I can tell you is that I would rather be a Superwire being given access to buildings by their owners than a High Speed or @Home being given access to rebuilt or upgraded cable system. The market for Superwire is huge, the deal for access as good if not better than that of a cable operator (whose broadband strategy will be based on the shared bandwidth model and for those that don't know, the more you add in the building, the slower the service).

Cables problems will be solved in the coming years as bandwidth frees up from other resources like cable pay per view channels (waste of bandwidth that will go away with video on demand deployments). Even so, the DSL pipe will still make sense in an MDU because the peak load traffic on a shared cable pipe will still slow the cable modem to speeds far lower than what Superwire can deliver on a dedicated DSL connection. As for smoke and mirrors. Entrata device has already been tested by many telco's and such players as Harris. The device works, all that needs to happen is the embracement by one of the large players to build it into their infrastructure. Superwire will be the first to deploy their technology in this type of commercial application.

As I mentioned, I think penetration rates will be very high. I also think every single RCN cable modem sub would switch to Superwire upon them offering their service. This is all viewing SUPW from the consumer and service standpoint. From an investor perspective, they will spend far less than either RCN or @Home in infrastructure costs and sub aquisition costs. This means a faster pay back period and pricing/cost advantage. If your costs are half that of a competitor, you can afford to price your service agressively and still exced their operating margins (or losses as is the case for @Home). That is not only compelling, it should frighten the competition.
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