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Technology Stocks : Echostar Comm.

SATS 130.96

+5.9%

Jan 14 3:59 PM EST

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To: Eric Appleby who wrote (1042)	4/1/1999 10:48:00 AM
From: Noel	Read Replies (1) of 1394

You may be right... It may be destined for $100... the event that broke it out of its cycle was the "merger" (they like to call it an acquisition) with News Corp. The higher this stock flies now, the lower the amount of shares they have to hand over when the deal closes. What's more, DISH is able to give the system away, and has found ways to convince their retailers to actually suck up and eat a portion of the costs, so that customers actually get paid for signing up. Wall street loves the sub growth. The question is whether or not these customers will be tied to the technology the same way as those who paid several hundred dollars for the system. Right now, Wall street is viewing the sub growth with one eye and historically low churn numbers with the other, and the combination has been rocket fuel. We'll find out in the next year or two if higher churn numbers will cause this thing to crater. Mind you, I am not talking about Primestar-like churn numbers - because they also had a technology gap that contributed to their problems - but there is no question that the low cost of entry to Primestar resulted in a low cost to exit to another service. None of this will impact the stock in the short term because of the lag time involved in churn calculations and the impact that increases in front end new subscriber numbers have in masking churn. Besides, DISH Network is a great service, and that alone may mitigate the majority of their churn issues... Regards, NOEL

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