I agree that it is old news, but I like the direction MCOM is taking with those partnerships with AirTouch, Nextel, ComTech and Netcom.
By the way, did anyone notice that the short interest for MCOM rose to about 1.5 million shares for October from about 1 million the month before? My read on this is that the original 1 million shares were probably covered as the stock started to move up, and the new 1.5 million shares were sold short somewhere up here in the mid to upper teens. I'm actually surprised that the short interest position isn't higher, given the upward move on the stock and the change in overall market sentiment. You can see the numbers and charts at:
viwes.com
Listened to the conference call today after earnings (or losses) were released. Earnings came in slightly better than expectations at -0.94/share. Bob Dilworth, CEO, said that the proxy to approve Vulcan's investment in MCOM would be out in mid-December. Vulcan has been conducting an intensive business review of MCOM. One change that is already being implemented is the acceleration of the 128 kbps rollout; MCOM is adding more engineers to the project to speed things up. The CEO was also very adamant in his opinion that Vulcan would be successful in rolling out the Ricochet technology nationwide rapidly, mainly due to Allen's perceived ability to obtain needed financing. The CEO estimated a nationwide rollout to cost $400 - 500 million.
Average subscriber acquisition costs dropped 12% in the quarter to about $520 per subscriber. Don Wood, Pres, expected this figure to drop to the low $400's by year-end. One way they are doing this is by lowering commissions to dealers. Even so, dealer productivity has remained on target. About 1/3 of sales come from dealers.
There are now about 17,000 subscribers on board, adding 2,000 in the quarter. A good question was asked about the "back-to-school" sales; MCOM said that they were de-emphasizing school sales because of lower profitability on those sales (students receive a university discount). Pops are at 11 million.
Cash position is now at $19.2 million, but Vulcan will be loaning MCOM $10 million, and the proceeds from the sale of stock to Vulcan will be coming in shortly. So the burn rate of about $11 million per quarter will be sustained. R&D expenses are expected to double next year.
Although right-of-way coverage in Los Angeles is up to 85%, covering 120 sq miles, rollout and marketing is being held back for the time being until a partnership can be worked out. Partner funded networks is a key theme going forward.
As mentioned in a previous posting, existing modems will be able to function as well or better than currently with the new 128 kbps network. The new 128 kbps modems will be smaller and possibly even cheaper than the existing modems. Service pricing has not been worked out.
That's about it; someone correct me if I'm in error or missed something. Remember, I'm a primarily a technician, not a fundamentalist, so give me some slack.
Congratulations to Vanessa Wittman (VP Finance, Investor Relations) who just had a baby!
I am now signed up with Ricochet and have received my wireless modem. Unfortunately, I've discovered that I'm out of IRQ's and COM ports. Anyone know how to get around this problem?
Rex |
