Jim, Re NextWave Telecom and the worries you posted about the ability to fund the whole thing..
"Nextwave owes $4.2 billion for the PCS licenses; annual interest payments of $274 million fall due in quarterly installments. That works out to $68 million every 90 days, or about $755,000 a day. "How the hell do they get that kind of money to make the payments?" asked George F. Schmitt, the president and chief executive of Omnipoint Corp., Nextwave's rival in the nascent PCS business."
Well this hasn't had much of an airing despite being in the title of this meandering stream. It did get covered earlier upstream, but briefly, the size of the numbers is irrelevant. Dealing in big things takes big dollars. The world is awash with investment money if the opportunity looks good to investors. They will stump up $10 billion easy peasy!
What matters is how much they will get back. Does the project make sense? The cost of frequency per person and the infrastructure cost makes sense per person - see the systems rolling out everywhere. So where's the problem?
The stockmarket is at all time highs with demand for investment opportunities flooding into the markets and pushing them ever higher. Way back in July 1996, it was obvious that it wasn't a good time for NextWave to seek investors. Now, with CDMA service rampant and successful, the economy roaring and sharemarkets high, they are much better placed to demand a high price for the investment opportunity to the benefit of existing NextWave shareholders, which includes Qualcomm Inc.
George Schmitt is disingenuous or stupid. How the hell do you get that kind of money? You show investors your business plan and wait for them to throw money at you in the expectation of big profits.
Of course, the current analysts of Qualcomm will say of NextWave - "Heck, look, they have a HUGE P:E right now, so keep away!!" Well, they haven't sold anything yet, so it will be people who can guess well on FUTURE P:Es who will buy the shares.
There was some discussion back here:
techstocks.com
No Worries!!
Maurice
The lambs are all getting bigger! They look like sheep now. They grow as fast as CDMA networks and subscriber numbers. |
