Airspan: Losing Balance on the High Wire Act?
by: Tom Taulli & Dave Mock | August 14, 2000
Since its IPO, Airspan Networks has been a roller coaster. The company’s IPO was on July 20, 2000 (raising about $82.5 million). Priced at $15, the IPO surged to $31-61/64 on its first day of trading, giving the company a $1.1 billion market capitalization. The stock hit a high of $49. Now? Well, the stock trades at $17-1/2.
The company is a pioneer in the fixed wireless market, introducing products as early as 1996. In fact, the company was a unit within DSC Communications. In 1998, a new unit was formed that effectively purchased Airspan from DSC.
08/09/00 - California vs. NYC
There hasn't been a battle like this since the '78 World Series. Keith Moreland decides once and for all the best locations to start a wireless company in the U.S.A.
07/24/00 - Waiting for the Dough
Seth Goldstein along with the merry band of merry VC at Flatiron Partners gets it. Chase Capital gets it. Draper Fisher Jurvetson thinks they get it. So what is "it"?
Airspan Network's main product, the AS4000 system, is a fixed wireless system that uses CDMA technology to provide voice and high-speed data connections in a point-to-multipoint configuration. Operating in the 1.5GHz to 4GHz region, a single station can provide near line-of-site performance to a substantial area; 70 square miles in an urban setting and up to 700 square miles in rural terrain. With a strong dose of intellectual talent, their core competency in CDMA technology has led to 18 patents granted in the U.S. with 20 more pending. They've also developed custom circuitry, called Trinity I, to power the heart of the AS4000 system.
Not just a hardware supplier, Airspan Networks provides one-stop shopping for fixed wireless solutions. Besides getting hardware, you can also get network installation, system integration, and training/ support services.
Also, Airspan's Network Management System (AS8100) is a flexible and scalable Windows NT-based tool that helps ensure the AS4000 operates reliably and efficiently. There is also a full suite of fixed wireless planning tools to help set up a system in any given geography.
As of the first quarter of 2000, revenues were $5.7 million, which was up from $1.3 million in the same period a year ago. But the company is hemorrhaging. The accumulated deficit is $72.1 million and it is likely that losses will not go away soon.
But there are definite risk factors with the company. Airspan focuses on markets that lack adequate infrastructure. Thus, the company had 98% of its revenues from overseas customers. About 72.3 percent come from Sri Lanka and the Philippines. Of course, these countries have a history of turmoil.
However, there is no doubt that Airspan has a top-notch management team. The Chairman of the board, Matthe Desch, was the president of Nortel Networks. The CEO, Eric Stonestrom, was the vice president of Network Management at DSC Communications. He also worked at Bell Labs.
The company also has serious backers. They include Sevin Rosen Funds, Oak Investment Partners, Venrock Associates, and Charles River Ventures.
Yet, be careful with this stock. It could tank even more. So, patience is key. |
