<any comments >
Amati is a story stock that has traded on hope, hype and perception. If some kind of contract noise is made, the stock COULD rise - no matter how financially unsubstantial (for instance, GTE is looking at probably 100K lines. This translates to adding approx .20 / share to WSTL/AMTX in the year it is deployed).
Technically, if it can't hold above 14, support seems to be around 12 to 12 1/2. It has currently broken well below it's 50 day, and would need to hold it's 200 day which is around 13 1/4.
If it DOES break down, 12 1/2 to 14 could become significant resistance as it has in the past.
But the real question is fundamentals.
Aside from hype found here, the likely delays in contracts and deployment will probably haunt this stock. Bells are just not as interested in jumping in to make the significant $$ committment to a technology which will have widely varying (and not reasonably testable) line specs.
And as cable moves in with HFC (which also offers phone and cable revenues) and cable modems, telcos will find it difficult to compete on either performance or price.
Then there are the radio wireless CLECs which provide both voice and bandwidth solutions (WCII, ARTT and soon to trade TGNT).
Competition may well spur the Bells to faster deployment, but ADSL is largely not a plug and play technology (regardless of purported selected field test results). There will likely be the need for a lot of handholding and technical support at the CO to trouble shoot bad lines. For instance, ADSL will NOT work over phone lines with bridge taps or load coils, and these are rampant on many RBOC lines - especially older ones - and they are not that easy to find. Further, poor quality older copper offers additional performance problems.
And until the recent Supreme court appeal is ruled on (maybe a year or 2), what LEC would risk massive deployment costs only to be required to resell that investment to competitors at cost?
And those COs that DO rollout trials and selected area service have been looking to a larger, better capitalized company for their ADSL solution - ALA.
Though bandwidth solutions of ANY type are exciting, so many uncertainties make ADSL a risky investment - especially over the next year or so. Even Gates thought it would be 7+ years until even 25% of US homes will be wired for bandwidth - what percentage of these will be DMT? And of those what percent WSTL/AMTX?
Not currently a stock for the faint of pocketbook...
My perspective anyway-
Steve |
