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Technology Stocks : PSIX up 26.5%, Takeover(?) -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (1526)	11/14/1997 7:48:00 PM
From: bob zagorin	Read Replies (1) \| Respond to of 5650

thanks for excellent analysis of iStar. Motley Fool had a good analysis of valuing ISP's and POPs but it was a year ago spring. I'll see if i can find it.

To: blankmind who wrote (1526)	11/14/1997 7:55:00 PM
From: bob zagorin	Respond to of 5650

Here is an excerpt from a Motley Fool analysis of UUNT back in April of 1996 (remember when it too was shunned by the street..before it was bought by MFS which was bought by Worldcom). "...UUNet is a heck of a lot more than the Microsoft Network, however. The company focuses on the business market for Internet access and offers both variable access speeds for multiple users as well as customer software services. In their last 10-Q, UUNet reported they had 348 POPs with 133 of them overseas---the largest international presence of any company. Of these POPs, 40 or so of them are very expensive hubs which cost at least a half million apiece to build. The some total value of UUNet's network alone, ignoring the 8,000-plus customers that UUNet already has, is north of $110 million and in my opinion is more like $150-200 million. With the undersea cable, which would dramatically reduce the cost structure of providing overseas networks, the additive value to the entire UUNet network would be incredible as they could provide networking services internationally on par with the huge telephone companies, with the additional bonus of being able to focus specifically on business clients who are willing to put more of a premium on service. Those 8,000 UUNet customers are nothing to sneeze at either. Unlike consumers, who can change overnight, business customers typically require a 2-3 month lead time to set up a network connection and configure everything for it, meaning switching in the middle is a costly proposition. UUNet has seen this customer base consistently increase the amount of bandwidth it wants, suggesting that net revenues will continue to increase at a health pace even if its prices come down...." It does give some idea of what these POPs are worth. That's why PSIX is so different than a Netcom or other ISP that only has customers.