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Technology Stocks : Advanced Radio Telecom (ARTT)
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To: stockman_scott who wrote (994)2/25/2000 9:58:00 PM
From: Obewon  Read Replies (1) of 1176
 
<<Why would Robertson Stephens (a highly regarded investment bank) initiate coverage with a 'buy rating' and not do all their homework..?? I think they looked under the hood of the firm and clearly understand the potential....some of us do too >>

I am long ARTT ever since early 1998 but I can think of several reasons why RS would initiate coverage with a buy rating and several of them aren't really good ones.

I have found few analysts that adequately do their homework before rating a company. The well known ones usually do because they can. (They have access to management or other inside info and they usually only cover one or two companies in depth.)

In this case, we are talking about a new analyst (strike one!) initiating coverage on a sector - wireless broadband (strike two). He has no even remotely reliable financials to support his coverage (strike three)since ARTT can't have reliable projections yet due to the fact they haven't really rolled out their 100MB service yet anywhere but one place in California. Read the analyst's comments on why he initiated coverage and you know their is little substance/story to the recommendation.

Few brokers are going to be able to support recommending ARTT to their clients over any of the other players (TNGT and WCII were also upgraded I bleieve) after the already substancial run-up it has had.

ARTT is going to have to come back to the markets for more cash eventually and RS wants to position itself to capture some of that investment banking business.

Obewon/Valuation Guy
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