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Technology Stocks : METRICOM - Wireless Data Communications -- Ignore unavailable to you. Want to Upgrade?

To: Jim who wrote (1492)	7/16/1999 12:31:00 PM
From: AJ Berger	Read Replies (2) \| Respond to of 3376

I don't think anyone's complaining about the current quarter. it actually looks good. it's the stock price that is the problem. if this stock was still under $10, and WCOM was not investing, we'd probably all be buying shares. the debate is how much premium we as shareholders are willing to pay on this yet to be built and marketed system, now that WCOM is aboard. As many point out, WCOM is getting most of this company for $10 per share, so why should we pay $40 per share for the 17% left to shareholders own. If you think MCOM has explosive potential, then you are willing to overpay, if not, you'll short this to a more reasonable premium and go long down there. That is the essence of the debate here, I believe. You can try to make a more educated guess by determining how many subscribers you think will pay for 128k service in the dozens of cities MCOM will penetrate over the next 2 years. Take that number, and multiply it by $5,000. That is about what each subscribers cash flow is worth in 10year cableTV/ISP system terms. Now take that product, and divide it by the number of shares or market cap of MCOM. Be sure to include the shares that are and will be issued for the new WCOM investment. So, let's have fun, and play with some round number. If you think MCOM can get 500,000 subscribers in the next 2 years, and you value each one at $5,000, then you have a company worth $2.5 Billion. Now, let's divide that by the 100mil shares that will probably be out there in 2 years. This leaves us a stock price of $25 per share. Now maybe you can see how MCOM may have gotten a bit ahead of itself during this current short squeeze, and why I'd always short above the $20's and long anywhere below the $20's. Keep in mind that unlike CableTV/ISP's, MCOM is much more vulnerable to losing their subscribers to new technology offerrings. This means that using that $5,000 cash value per subscriber over 10 years is a Very generous allowance here. rebuttle welcome.