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Technology Stocks : Leap Wireless International (LWIN) -- Ignore unavailable to you. Want to Upgrade?

To: Pierre who wrote (2272)	6/27/2002 4:40:51 PM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 2737

I talked with investor relations earlier today and asked if there was any news or comments that would explain the weakness of the stock. There were none, other than overall pessimism regarding telecom stocks, especially those that are not cash positive. The company expects to meet all its covenants except one--the ratio of total debt to total contributed capital--which is supposed to be met by 2004. The statistic which interests me, and which in my view is most important as an indicator of future profits, is the percentage of subscribers who use only the Cricket service as a replacement for previously used wired phone service. Apparently some 28 percent fit this category so far. What this says is that demand for Cricket service in a given area may exceed demand for ordinary cellular service, which is used by most subscribers to augment wired service. Also a second part of the Cricket service that hasn't gotten much play is long distance, which is charged at a flat 8 cents a minute, but which requires a prepaid account. The rate of 8 cents a minute is cheaper than most wired long distance services, which typically have higher rates during peak use periods and lower rates on evenings and weekends. The pricing policy of Cricket service stands to create a higher rate of subscriber growth than for conventional cellular services. Now the big question is whether they can make any money at this. Art

To: Pierre who wrote (2272)	6/27/2002 6:04:27 PM
From: bruce_hamilton	Respond to of 2737

Pierre, The negative news Leap is: in the wireless telecom space proving a new business model in question of making VF covenants (has) huge debt loads. has a fraud issue that keeps getting run up the flag pole is being valued using EBITDA CNBC this morning made note, with a list of things to avoid when investing. All but the VF covenants was on the list. Even if you believe in LEAP the market doesn't, and that is reflected in the stock price. Now, if you think the market is wrong well like they say put your money on the table. I took mine off before earnings last Q because of huge short positions and no VF deal was forthcoming , which was then announced the next day along with earnings and the FRAUD issue. Bruce