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Technology Stocks : Winstar Comm. (WCII)
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To: Bill Lotozo who wrote (11936)5/22/2000 2:18:00 AM
From: Bernard Levy  Read Replies (2) of 12468
 
Bill, my guess is that companies that are *not* fully
funded until the end of 2001 will undergo an extremely
painful phase and may either go under or be acquired.
Those that are fully funded will suffer stock-price
wise but may actually benefit business-wise if they can
participate in consolidation activities.

It looks like NXLK and WCII are in the best shape among
wireless CLECs (Winstar's government contracts
give it an element of predictability). TGNT the stock
is really in bad shape right now, even though the company
is fairly well funded. The company that could be hurt
the most by a recession is ARTT. I think it will
find it difficult to survive as a stand-alone entity.
Perhaps this is when Qwest will step in to take it
over outright.

In summary, I think a reasonable case can be made that
the sector the most sensitive to interest rates outside
of home building is not the banks or the retailers,
but the telecom companies, because of their need to
access the debt market to pay for infrastructure
expenses. Conversely, when the rates go the other way,
the whole sector will probably have a great move
(even ``old telcos'' such as T, WCOM, or the baby Bells
have been hammered during the last 6 weeks).

Best regards,

Bernard Levy
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