Covad Communications - COVD Message Board

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Technology Stocks : Covad Communications - COVD

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To: SteveG who wrote (11)	1/22/1999 3:07:00 PM
From: Bill McCullen	Read Replies (3) of 10485

I glanced at the prospectus today to see how many shares are out now and it is close to 50M!! Thus at $40 somebody thinks this company is worth $2B...yikes. There are literally hundreds of these small "data CLECs" out there of which COVAD and Northpoint are two of the early leaders. It is a good company with decent prospects but $2B!! I don't think so. The closest comparison I can make is to the CAPs that came public in the early 90s (like Metro Fiber Systems [MFST] which was bought by WCOM). MFST was a great company but it took time and a lot of revenue to reach a $2B MC. COVD has less than $5M in revenue for the first 9 months of '98 and xDSL prices are going nowhere but down and down fast if the RBOCs ever get their stuff together (big if). Plus MSOs are starting to target businesses (prime market for the Covads of the world) with cable modem services which will be cheap. Congrats to anyone lucky enough to get it at the offer price. Regards, Bill

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