<..I think this meeting really has people confused (at least it does me) I'm under the impression that the analyst meeting was called so that the company could positivly spin the faster, deeper, and European, buildout that is expected to be announced soon....>
You may remember previous announcements for this analyst meeting originally scheduled for Nov 17th [for instance: techstocks.com
This meeting was intended as a one day "teach-in" (MY term) to get buy and sell side analysts more significantly up to speed on the technology and business plan (some might be surprised at how little many buy-siders actually understand companies like WinStar). Then Lucent $$$ in late October allowed the reasonable reconsideration of a faster/broader build (than their original plan of 40 top US cities and ebitda breakeven by 2000) into top 50 US and 50 foreign markets.
So the meeting will be a significantly UPDATED version of this same "teach-in" - which will be a full day of presentations by everyone at WCII - Bill, Nate, Ackerman, Schmeig, Dixon and most (if not all) of the various division heads (fwiw, the head of NewMedia/NM-Internet is schedule to make a presentation. WCII is well aware of the potential value of this asset if broken out. The company however, is entrenched in focusing on what they see is their #1 mission - expediently building a ubiquitous, HBW local phone company. This focus, however, does not rule out the breaking out of NewMedia Internet at some point)
<...The fear is that the street will look at this negatively, ie deeper loses, more debt, worsening EBITDA, longer time to EBITDA breakeven, etc...>
From everything I have heard, most sell-siders don't view this fearfully. In any case, WCII fully realizes the value of bringing in additional revenues ASAP (through a variety of venues) to help offset any delay in ebitda this faster build might present.
<..So I don't know if the anticipated news before the meeting will be a release of these new plans, or something else, and the plans will be spelled out at the meeting...>
Any formal "material" announcements would NOT be made behind closed doors... could be made before or after. Fwiw, I personally think we will get some such announcement soon.
<..Thing is, I don't see how these plans and this meeting can do anything positive for the stock; isn't all this news already in the stock?...>
Clearly, depends on the news specifics.
<..Is there anybody here who isn't expected a faster, deeper build and a move into Europe? And the concerns about a longer time to EBITDA breakeven and deeper debt may be legitimate...>
Some may not expect this, but in general I agree that it could go either way if this is all that is announced.
The company is WELL aware that bringing people to NYC on about 10 days notice, one week before Christmas, better be worth while. I suspect they think it will be. I am guardedly optimistic (on the stock price) over the next week - and then again going into Solly's Scottsdale conf mid Jan (which is also about the time we should hear about NY GSA). [that's "guardedly"]
PS. In the past, WCII has made the point they wouldn't do Europe without a $$ partner. Trust (or not, and then sell) that even with LU funding their capex, WCII mgmt doesn't intend to blindly burn through their cash on ebitda without solid sources of revenues to guarantee their success.
IMO, they've come a LONG way - with a lot of skill and a fair amount of luck - and they have no intention on throwing their success away by an incautious homerun swing. They will play it to, not past, the limit.
And fwiw, I sold all of my long trading positions this AM on the expectation of significant market selloff into the weekend - courtesy of Capital Hill. (I'm surprised there isn't yet an SI opinion thread on impeachment/censure - too busy to start one myself but WOULD put in my 2 cents if anyone else created one.)
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Fwiw, from CSFB this week (not directly related to WCII):
Frontier - Fiber Swap With Enron Enhances Another New Entrant's Competitive Position – Signs New Optronics Vendor.
1. Frontier and Enron (the big gas pipeline and electric utility company), agreed to a fiber swap last week. Frontier will gain two additional network rings and redundant routes in the Western half of the U.S. by June of 1999. Enron gains rights to an unspecified amount of capacity on Frontier's network. While this is a good move for Frontier in terms of giving it a more robust network, it does raise the competitive stakes in the industry by facilitating the entry of more competitors. This, among other factors, will lead to faster
wholesale price erosion, which eventually leads to more retail price erosion.
2. Frontier announced plans to purchase DWDM equipment from Pirelli Cables and Systems. By installing DWDM, Frontier is capable of scaling the capacity on its network routes to OC-192s. DWDM technology is allowing carriers to put OC-192s on ring networks for the first time. Recently, Northeast Optic Networks said that it expects to utilize DWDM to light all of its new routes at OC-192 capacity, skipping the stacked OC-48 stage. Frontier, however, says it will only scale capacity to OC-192 if the demand warrants. There is no question about this demand in the northeast, it is certainly a question on all national routes as Frontier's comments suggest.
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