Kingpin:
<<Jason do you think that these thousands of companies are willing to wait for the commercial deployment of such devices?>>
To me, this is the the heart of the problem I have with Winstar, along with the 2 billion hole they have dug for their shareholders.
If Winstar serves such an "untapped" niche, desperate for bandwith without alternative means to get it, why has revenue growth been so anemic to this point? Why has rollout in the other major markets taken so long?
More importantly, why are these revenue streams still not profitable? You could say that Winstar is building out their system, and therefore reinvesting in the future. But this wouldn't be entirely correct. Winstar continues to lose money on an operational basis, before cash flow from investment is even taken into account. I have to question why? Perhaps the cost of collecting and servicing these revenues, is simply larger than most have imagined.
If indeed Winstar's commercial rollout begins in earnest now, why will it still be unprofitable two years from now?
<<There are no current obstacles to rapid revenue growth. If revs ramp up the stock price will rise. If the street feels revenue growth can grow rapidly and unchecked indefinately, the stock will explode.>>
Given the way this market behaves, I'm apt to agree with you. For now. But at some point, revenue growth alone won't be enough, particularly as the market starts to realize that margins in telecommunications will get squeezed. Ultimately, the market will want to see a profitable revenue stream. Not just a revenue trickle.
In the meantime, the volatility on the out of the money options was just too juicy for me to pass up. Best of luck.
Regards,
JC |
