[Asensio & Co.: CellularVision's Stock Overreacts to Early Auction Results]
NEW YORK, Feb. 23 /PRNewswire/ -- The following release was issued today by Asensio & Company, Inc.:
CellularVision USA, Inc. (NASDAQ:CVUS) shareholders have suffered a financing delay, significant pre-auction insider stock selling and the widely held perception that CVUS has recently generated poor operating results. The only support available for CVUS' stock price has been the intrinsic value of its New York City metro region LMDS license. CVUS' license covers approximately 8.4 million POPs, and an approximate daily increase of 2.5 million office workers, in the nation's largest Telecommunications market.
The immediate value of this license will be greatly impacted by the long-delayed, now on-going LMDS auction. Today the evidence indicates that LMDS license prices may be below expectations. These indications include a low number of bidders, bidding deposits, and initial bids. However, the bidding is not closed and it is still too early to judge the outcome. Furthermore, the suburban New York BTA, which is far less densely populated and less lucrative than CVUS' market, has attracted the highest initial bid.
Asensio understands the market's management concerns. CVUS' agreement to use certain insider-held patents may soon become less valuable to the company. If so, Asensio believes that the current structure will change. Asensio believes management has acted prudently and properly. Despite difficult operating circumstances CVUS is almost debt-free. The FCC granted CVUS its LMDS license primarily due to management's outstanding LMDS legal and technical pioneering efforts.
Asensio believes that CVUS' New York City LMDS market is by far the most valuable in the country. At $6 per share, CVUS' license has an approximate indicated $84 million market value. This equals approximately $10 per POP. This is for a license that allows high capacity wireless transmission of television, heavy data traffic and telephone services in New York City. Asensio estimates its immediate worth at between $20 to $25 per POP. Asensio believes the license's comparable value will provide CVUS with sufficient collateral to build-out the system. The construction delays will allow the company to use better, less expensive equipment than currently available. Asensio believes that the company is worth over $10 per share short term and much higher after LMDS develops into a national industry. However, as experience has shown, nothing will be immediate or easy with a new technology and industry.
Copyright 1998 by Asensio & Company, Inc. All rights reserved. This report should not be construed as an offer to sell or solicitation of an offer to buy any securities. Opinions expressed are subject to change without notice. This report has been prepared from original sources and data which we believe to be reliable but accuracy is not guaranteed. This research report was prepared by Asensio & Company, Inc., whose stockholders, officers and employees may from time to time acquire, hold or sell a position in the securities mentioned herein. Asensio & Company, Inc. may act as principal for its own account or may sell or buy to or from its customers the securities described herein. Asensio & Company, Inc. may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any company mentioned in this report or its affiliates.
SOURCE Asensio & Company, Inc.
-0- 02/23/98
/CONTACT: Manuel P. Asensio of Asensio & Company, 212-702-8805/ |
