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Technology Stocks : NEXTEL -- Ignore unavailable to you. Want to Upgrade?

To: Al Gutkin who wrote (3597)	12/10/1997 5:06:00 PM
From: Jay8088	Respond to of 10227

Al. thanks for the cogent point. A couple of years ago, Smith Barney computed the private market value of Nextel spectrum at north of $45 per share..... and that is before the McCaw's business model starting to take off and before Nextel expanding internationally. The capacity concern raised by PT is the main bearish argument ( for example, see Value Line ). And the potential competition from PCS is hard to estimate at this point. PCS would certainly eat into analog cellular market. Would PCS be the dominant digital cellular standard? Hard to tell at this point. However McCaw is building up and marketing Nextel as a unique business productivity tool. For now he is the firstest with the mostest in that market place. Historically many battles have been won that way. Overall, I would rather be a McCaw groupie than a follower of Sprint bureaucrats.

To: Al Gutkin who wrote (3597)	12/10/1997 6:45:00 PM
From: P.T.Burnem	Read Replies (2) \| Respond to of 10227

Regarding Nextel: Communication licenses (channels) are also valued at cost for accounting purposes. However, once the license is utilized it is worth lots more. The asset(license) is still stated at cost on the financials. For example: A few years ago, a license cost less than $ 100.00. I know, I have one. However, the fair market value of a license is quite a bit higher. My license was worth approx. $10,000, without even being built out with equipment and operated. Hope you can see by my simple example that there is another way of valueing a comminucation company. OK, let's estimate the value Nextel's licenses: In the auction, Nextel bid $88.8 million for 475 of the 525 Economic Area licenses being auctioned by the FCC. On average, Nextel won rights to almost 10 MHz of spectrum in areas covering all 50 states and approximately 98% of the U.S. population. .... Overall, including the frequencies secured as well as other frequencies owned by Nextel in adjacent 800 MHz ranges, Nextel now owns on average 15 MHz of usable spectrum in major markets in the United States and approximately 10 MHz in the entire U.S. Let's see: 10MHz USA-wide is worth $88.8M, 5MHz in major markets - another $41.2M (let's be charitable), which brings the total to $130M or a whopping $0.50 per share! Note that as the useable spectrum expands, the value of Nextel's licenses is bound to go down. 15MHz can theoretically support up to 3,000 simultaneous phone conversation per base tranceiver. That times the number of transceivers on the Nextel network equals its peak capacity. PTB

To: Al Gutkin who wrote (3597)	12/10/1997 7:55:00 PM
From: Arnie Doolittle	Read Replies (1) \| Respond to of 10227

Al, re valuation methods: NXTL is not valued as a specialized industry, as you suggest. No, it's valued as a startup which has tremendous future sales and profit potential in a rapidly growing industry. In fact, it's "best of show" in its industry. There's no mystery to valuing the company. You're right that NXTL has lots of blue sky (intangible assets - in this case in the form of licenses), but a company's value is based on its future. Thee are few other public companies selling at NXTL's market cap with its potential. How few? No others that I've found so NXTL is in a pretty select situation. The debt scares many folks, including me, when they first look at the slick glossies. But a close reading reveals the real likelihood that the current megadebt will/can be paid off before 2005 if current assumptions are correct. In fact, the debt won't be completely liquidated because NXTL will be investing in additional areas down the road that will increase market cap even beyond our current hopes. In other words, they'll be growing the business. Arnie