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To: Bob Kim who wrote (146415)	8/29/2002 12:36:44 AM
From: H James Morris	Respond to of 164684

Bob, the last time I checked KB was a VC along with Lise Buyer, and Danny Rimer in silicon valley. Everyone on this thread remembers Danny! >>But now, just a few years later, the idea looks like a failed experiment. Well-known former analysts like Lise Buyer, Keith Benjamin, and Danny Rimer have found the transition far more arduous than expected.<< redherring.com

To: Bob Kim who wrote (146415)	8/29/2002 1:06:18 AM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Bob, can I trust the weasel? Who is Thomas Weisel Partners? Nextel Communications (NXTL; $8.21; Cap $6.69bn; Buy) - Solid business momentum results in an "EPS story" at Nextel; Possible upside to current estimates; Reiterate Buy. Solid business momentum and astute balance sheet management make NXTL one of the more interesting stocks in the telecom universe at this time, in our view. Should current business trends continue, we believe there is excellent potential for upward estimate revisions, especially in 2003-2004. We are conservatively modelling Nextel's net adds for the balance of 2002 and look for subscriber adds of 465,000 in Q3 and 440,000 in Q4 (modestly below guidance) compared to an average of 485,000 per quarter in 1H02. For FY02, we expect 1.87 million new subscribers, revenue of $8.6 billion and EBITDA of $3.1 billion, slightly ahead of guidance of $3.0billion. Our estimates assume flat EBITDA margins in the 2H02 compared to 2Q02, which contrasts with the 1400 basis point increase over the last four quarters (now almost 38%). In other words, margin improvement is more likely than our estimates imply. Nextel has made substantial progress in improving its balance sheet this year, retiring $1.833 billion of public bonds and preferred stock in exchange for $500.0 million in cash and 94.0 million of new common. Along with its substantial cash balance, these advantageous moves virtually eliminate the possibility of a balance sheet restructuring, in our view. Nextel is now positive EPS, generating $0.37 in Q2 (due in part to extraordinary debt and preferred stock retirement gains). However, we expect Nextel to report operating earnings per share of $0.58 in 2003, and $0.97 in 2004. Based on the "new and improved" capital structure, Nextel trades at 6.5x 2002 estimated EBITDA and 5.7x 2003- estimated EBITDA, a discount to Sprint PCS and a modest premium to AT&T Wireless. On a P/E basis, Nextel (growing EPS at 25+% compounded beginning in 2003) is trading at 14.2x our 2003 EPS estimate of $0.58, versus the average of the local telephone group of 10.9x (growing at 5-10% compounded). We reiterate our Buy rating on the shares of Nextel Communications. Estimates: Dec '02 Net Adds 1.87 million, Rev. $8.6 bn, EBITDA $3.1 bn, EPS $0.05; Dec '03 Net Adds 1.5 million, Rev. $9.6 bn, EBITDA $3.6 bn, EPS $0.58