1. CISCO BUYS AIRONET
Cisco Systems Inc. (CSCO, $74, down 1) announced today that it has acquired Aironet Wireless Communications (AIRO, $45, up 2) for nearly $800 million in stock. Under the terms of the deal, each share, option and warrant of Aironet will be converted to 0.637 shares of Cisco common stock. Based on Cisco?s closing price of 74.25 today, each Aironet share is valued at $47.
COMMENT: Wow!! We loved Aironet to start with and, obviously, Cisco did too. This transaction gives us a 115% return in six weeks time. With Cisco ?s strong earnings for its first quarter of fiscal 2000, those who don?t want to incur a short-term capital gain should just hold Cisco, a long-time member of The Bull Market Report?s Long-Term Core Holding Portfolio. For those of you who want to move on, you may wish to sell AIRO and place the money elsewhere. This story is over for now although magically, AIRO has become Cisco in an instant.
We will be looking to replace Aironet in The Wireless Investor?s portfolio. Stay tuned.
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2. QUALCOMM UNVEILS WIRELESS INTERNET STRATEGY
Yesterday, Qualcomm Inc. (QCOM, $300, up 10) successfully demonstrated its new High Data Rate (HDR) technology capable of supplying reliable and cost-effective high-speed wireless Internet access to consumers. HDR is fully compatible with Qualcomm?s existing code division multiple access (CDMA) technology and is expected to be competitive with Digital Subscriber Line (DSL) and cable-based solutions and will also support mobile access. Utilizing a variety of terminal equipment, the Company demonstrated data rates of up to 1.8 Megabits per second (Mbps) in both fixed and mobile environments. The technology can be embedded in handsets, laptop and handheld computers, and other fixed, portable and mobile devices. The Company also released details of the introduction of a new family of chipsets and system software that support HDR technology.
COMMENT: Essentially, HDR provides voice network operators the opportunity to leverage their existing infrastructure equipment to obtain higher capacities and superior performance by maximizing voice and data spectrum separately while serving both applications from the same network. With megabit-per-second data speeds supporting e-mail, web browsing, e-commerce, and other applications, HDR offers end-users continuous, untethered access to the Internet and next generation data services. Even though Qualcomm is up an unbelievable 1,050% so far in 1999, with the continued worldwide acceptance of its CDMA wireless technology and the rollout of HDR, Qualcomm may well be looking at further gains in 2000 as well.
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3. BELL ATLANTIC: TO OFFER INTERNET ACCESS FROM CELL PHONES
Bell Atlantic Corp. (BEL, $63, down 2) announced that it would sell Internet access to its digital wireless customers for $9.95 a month, joining the race to bring e-mail and Internet content to customers? palms. The new service will be available in Bell Atlantic?s East Coast markets on Nov. 17. Customers will need a new Qualcomm 860 Thin Phone, which sells for $119.99. The Qualcomm 860 phone also has a built-in dial-up modem, which customers can use to connect to the Internet using laptop computers with a connection kit Bell Atlantic will sell for $79.99. Customers who add the Internet service to their calling plan will be able to use monthly minutes for voice or data calls.
COMMENT: Bell Atlantic is joining rival Sprint PCS (PCS, $77, down 2) in rolling out a wireless Web service that will allow customers access to information such as weather, news updates and travel and flight reservations from their phones. Next month, Bell Atlantic said, it will begin selling two other Web-enabled phones, Qualcomm?s pdQ 800 smartphone and Motorola?s (MOT) Star-Tac 7860. Significantly, all phones use The Wireless Investor favorite Phone.com?s (PHCM, $279, down 6) browser software. While Bell Atlantic is moving in the right direction, Phone.com is already there. With the wireless Internet market only now emerging, Phone.com has lots of room to run.
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4. WIRELESS MEDICAL DEVICE COMPANY GOES PUBLIC
Data Critical Corp. (DCCA) was brought to market today at $10, below its estimated pricing range of $11-13, in its public offering of 3.5 million shares. The Company provides wireless access to a patient?s vital signs from remote sites. The Company?s shares closed up 0.62 at $10.62.
COMMENT: Data Critical is one of the first companies to go public utilizing wireless data technology to focus on a specific market. As the stock priced under its estimated range and only closed up a shade, the offering certainly is not one of the better received technology stock offerings of the year. Notwithstanding the poor initial performance, the company is worth exploring as it provides a good example of the new applications for the emerging wireless data market that have the potential to disrupt many industries.
Essentially, Data Critical is a developer of wireless health information communications systems for the hospital, physician and at-home consumer markets. By allowing caregivers to monitor the vital signs of patients remotely while performing other tasks, the Company hopes to reduce the overall costs of a healthcare organization by allowing hospitals to reassign or reallocate staff whose primary responsibility is to centrally monitor patient critical care data. The Company also hopes that use of its products will improve medical care by allowing immediate remote access to critical care information so that physicians can respond more rapidly to adverse changes in patients? conditions.
If Data Critical can partner with existing equipment manufacturers, its stock might prove to be a huge winner. While we?re not yet recommending the purchase of Data Critical as the company still has some large roadblocks to cross, we do like to see pure play companies making use of wireless data technologies coming to the public markets. The disruptive effect of the wireless Internet has only just begun.
If you have any comments or questions, please send email to me at WirelessInvestor@Bull-Market.com.
Chalmers Poston
Senior Contributing Editor
The Wireless Investor
November 9, 1999
Chalmers holds degrees from UNC-Chapel Hill, the University of South Carolina School of Law and from Georgetown University. He has been involved in ventures in many industries and is currently involved in a small business startup using a wireless device to outsource medical billings.
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**** DISCLAIMER ****
The Bull Market Wireless Investor is not a registered Investment Adviser or a Broker/Dealer. Readers are advised that the report is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy. The opinions and analyses included herein are based from sources believed to be reliable and written in good faith, but no representation or warranty, expressed or implied is made as to their accuracy, completeness or correctness. Employees of The Bull Market Report and The Wireless Investor may have positions in the stocks that are written about.
Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report should be independently verified with the companies mentioned. In addition, we are taking no compensation of any kind and will never take any compensation from any companies that we mention in this report.
¸ Copyright 1999 The Bull Market Wireless Investor and The Bull Market Report, LLC. |
