Winstar Comm. (WCII) Message Board

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Technology Stocks : Winstar Comm. (WCII)

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To: blankmind who wrote (2273)	9/30/1997 5:46:00 PM
From: Richard Dunaven	of 12468

Technically if a stock breaks it's resistance after a triple top there is a 75% probability that the stock will go atleast 25% higher. Usually the stock will break this resistance and pull back to the previous resistance which now becomes support for the new trading range before going higher. So far WCII is perfoming to this model. The rumor which has not been confirmed by either Co of WCOM buying BFPT for 1.8 bil adds fuel to the fire. This prices this stock at 19 times trailing 12 revs. WCII is trading at 8.7 times trailing 12. The difference is WCII will grow much quicker than any of the others due to their speed to market and reduced cost per mile to go on line. If you value WCII the same way 18 times 72Mil is 1.368 bil or $41 / share using 33 mil shares outstanding. In addition to the BFPT buy out we must look at the Nippon buy of 12.5% of Teligent. Based on this purchase Teligent is worth 800 mil. Since Teligent has roughly half the spectrum of WCII this would place a value on WCII of 1.6 bil. Now since WCII has a sales force and real revs and is building out a local network they are 3 yrs ahead of Teligent. What premium is this worth? Lets say 400 mil which may be low. We now have a co valued at 2 bil which based on 33 mil shares is $60/ share. Can we get it? Probably not today but it does lend some insight as to where this sector is going. The question was raised by Steven as to what a proposed BFPT buyout by WCOM does to the chances of a WCII/WCOM alliance. I think it only helps it because the more fiber based system WCOM has the greater their reach is going to be with 38 Ghz. Hence the faster they will grow. Don't forget BFPT has 400 mil in cash to play with and between MFS's cash and BFPT's cash they can really focus on expanding their presence with 38 ghz to many buildings they were not previously able to go to. Their revenue potential increases by multiples with the use of 38 Ghz. There was a lot of stock eaten up in the 19 to 19.5 range today so we should start closing that gap tommorrow for the move higher. We shall soon see!! See Ya! Ric D.

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