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Technology Stocks : METRICOM - Wireless Data Communications
MCOM 0.005200.0%Dec 3 10:24 AM EST
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To: Lewis Edinburg who wrote (912)1/21/1999 1:05:00 PM
From: Phuoc Le  Read Replies (1) of 3376
 
Lewis,

You're absolutely right. However, the deployment of the Bay Area beta did not cost that much for them. It's the work on getting the access agreements that's costing a lot of money. I beg to differ that the hard work (financially anyways) is behind them. If you look at how much it costs to deploy a Ricochet network in a metropolitan area, you'll realize how much money they'll require to outfit the 14 metropolitan areas they're negotiating for access rights on.

This will be a major expense for them (to deploy the network). As it stands right now, they just don't have the money to deploy it. The company itself warned in its SEC filing that without capital, there will be a SIGNIFICANT impact on their deployment of the network. Maybe they'll be able to arrange some type of financing, but I doubt they'll get any financing that will not cost them an arm and a leg in terms of interest expense. Financially speaking, MCOM is a risky company to lend to and for that, MCOM must pay higher rates than other safer companies. Can MCOM afford to make even interest payments, assuming they can get some kind of financing? We'll all see I guess.

I just covered my short this morning of MCOM (500 shares sold at 8.375; bought at 7.625), so I'm happy. And as I'm typing, MCOM is dropping to 7 1/2 by 7 3/4. If you're long, good luck.
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