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To: allen menglin chen who wrote (475)	1/30/2000 2:09:00 AM
From: chalu2	Respond to of 566

Now, now, no need for a snide tone. I responded to the article quite respectfully. The short squeeze argument makes no sense--there was no short interest to squeeze at the beginning of the run up period cited by the author; yet he attributes the run up to a short squeeze. The author also notes enormous volume during the period in question--far higher volume by a great multiple than even the 400K shares reported short at the end of the supposed short squeeze. The author appears not to understand the conditions and activity necessary to a short squeeze. We've had weeks of 30-40 million shares volume at times. Squeezing 400,000 short shares could produce-what?--1-2% of that volume? The author's reasoning and knowledge in this area, at least, seems questionable. Yes, I know how much KPN will pay for the shares. But that is not relevant to valuing this company's prospects in KPN's hands. This is not a purchase of a minority interest at a discount. Rather, we have essentially a transfer of the company to KPN's hands; if KPN is serious about developing this company, we can only imagine what it could create with its tremendous contacts and resources. I remember last year when, in a similar situation, Irwin Gross (the largest shareholder in Rare Medium) took over a penny stock called Interactive Flight Technologies (now GTLL). Gross brought much to the party; even though he acquired many of his original shares at under $4 less than a year ago, we have seen GTLL rise as high as $25 recently, a 525% rise. This is just an example of why equating a low investment price by a prestigious investor with low potential value can be a serious error. Often smart cookies like Gross and KPN see possibilities close up that we cannot see from a distance. Any other take on this would lead us to conclude that KPN is foolishly locking itself into a long-term investment with little upside. Fools they are not. I would be very nervous to be short this stock. I know what I can lose on the long side--no more than 100% of my investment. Short losses can hypothetically be unlimited. I'm sure Mr. Chris Byron will be educating us in a future article as to precisely how this works, and the hedging strategies needed to avoid ruination :-).