William, there is a good cover story in Barron's about the woes/wars of the wireless biz, and they are not kind to NXTL one bit.
Here is a little teaser excerpt>
Nextel bond buyers effectively can purchase the company for less than four times projected 2002 EBIDTA. Here's why: With its bonds trading for less than 70 cents on the dollar, the debt market effectively is saying Nextel is worth under $10 billion ($13 billion times 0.70) with no value left for shareholders.
(The figures I have show total debt @17 billion, adding in the obligations of their international subsidiaries, making a much bigger crater for shareholders)
Nextel, Sprint PCS and AT&T Wireless all are expected to have negative cash flow -- about $2 billion this year for AT&T Wireless and Sprint PCS, and $1.3 billion for Nextel -- in part because of high capital expenditures to expand and maintain their networks. Their cash flow is unlikely to turn positive until 2004, or 2003 at the earliest.
All the likely scenarios leave Nextel, with its proprietary technology and leveraged balance sheet, out in the cold.
I am a trader, and that is what I will do with NXTL and all the rest. Up & down...
Some will find traction next week, others may not... |
