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Technology Stocks : Winstar Comm. (WCII)
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To: Gary Kline who wrote (8153)9/4/1998 5:36:00 PM
From: Jason Cogan  Read Replies (2) of 12468
 
Gary:

<< What I would like to know is what is your threshold to be
bullish? Number of customers/lines/EBIDA positive/positive earnings?
When does the story in your mind crossover from being too risky with
unknown variables/potential competing new technologies to one you
would put your money long on the company.>>

Excellent question, although admittedly difficult to answer. At a minimum, I wouldn't touch Winstar until it was EBITDA positive. Maybe that's just my conservative background, but there are too many places where I can earn positive returns on my money. I do not consider myself a venture capitalist, and I don't think most on this thread realize that a Winstar investment is a venture capital investment. If and when Winstar turns EBITDA positive, there will still be ample time to capture the remaining upside, with considerably less risk.

Besides the EBITDA metric, the types of customers are important. A large corporate customer making a total committment to Winstar might get me interested. Somebody like GE or IBM saying "We have examined the competitive landscape for telecommunications services, and have decided to give Winstar our exclusive business." Until such time, I think the issues concerning reliability and performance prevent Winstar from achieving the necessary revenue growth.

Regards,
JC

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