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Technology Stocks : Winstar Comm. (WCII)
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To: gruetz who wrote (12167)9/27/2000 12:25:07 AM
From: Bernard Levy  Read Replies (1) of 12468
 
Hi gruetz:

From a technology and comparative cost point of
view BBFW has a bright future. What's rough on the
CLECS right now is that they are deploying comprehensive
networks at a great cost in an environment where
incumbents with much greater financial resources are
fighting a battle to the death to defend their turf,
and where debt markets are not very receptive to
telecoms. I have no doubt that whoever will ultimately
operate Winstar's wireless network after its build out
will have on its hand a great cash machine. The
problem is between now and then. Competitors with
great amounts of money will try to drive it and other
CLECs out of business to get the assets on the cheap,
or debt holders would like nothing better than
wiping out the equity holders and grab all the equity
for themselves, or possibly WCII will be able to
survive until the promised land of positive EBIDTA
first, and profitability second. So who makes money
out of Winstar is still up for grabs, but that
broadband wireless is a superior way of delivering BW
to customers rapidly and inexpensively is totally clear
to me.

My only advice is not to have more than 10 to 20%
invested in the CLEC sector, and have it distributed
over the most likely survivors: XOXO (what a horrid name),
MCLD and WCII. The other advice is for investors
to impress very strongly on Rouhana that grandiose
worldwide dreams should be put on hold and WCII
should be run thriftily. One aspect that has
always troubled me is the exhorbitant stock option
grants awarded to Rouhana. Time for him to tighten
his belt.

Regards,

Bernard Levy
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