Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: SteveG who wrote (8596)	12/28/1997 6:24:00 PM
From: Trey McAtee	Read Replies (1) \| Respond to of 21342

steve-- now, as for whether you have been too negative, you have. end of story. i am not saying that we have not been just as positive, but i think you are overestimating the negatives. my interpretation of your statements leads me to conclude that you believe the telcos are dead and that coax is king. my problem with cable modem #s is that they are, or at least seem to be, overstated. i do not doubt that 100% growth in the arena is possible, and i do in fact agree with you that it will occur. however, the cablecos are saddled with so much debt( a point few research firms or yourself seem willing to concede) that building out their networks is going to be very difficult. plus with the specter of reregulation of cable rates looming, you have to wonder abou the validity of the cable modem case. now, cable modem growth is also going to be slowed by the introduction by the telcos of xDSL services. you have to accept that. most of your handicapping of the situation seems to be based on your opinion that the telcos are going to delay deployments so they dont give competitors an advantage. you think they look only at the CLECs as competitors. let me tell you this, the telcos arent all that worried about CLECs. they are worried about the cablecos. you see we will have large scale deployment within 6 months. the telcos have no other choice, but to go out of business. in addition, while cable penetration is around 70-80 of the US, telephone penetration is around 98-99%. and the stuff about 50 % of the lines not able to use DSL is rubbish. ten years ago 1Mbps over POTS was unthinkable. i have little doubt they will be unable to engineer around any big problems in the network. now, we do have some significant problems, but the ability to deploy just isnt one of them. this kind of pap has been around for years, and it just really isnt that big a deal. sorry, but forrester, et al., can say what they want. i am going to listen to the people who actually know the network. now, encryption.....DES is still alive because the government keeps it alive. talk to anyone in crypto and they will tell you that DES is inferior. i am not going to argue the point with you on that one. but, i will say this...even with a dedicated processor decrypting the stream, it is still going to slow down the feed. when you combine that with the loads of other users in a real world environment, cable and DSL are just about in the same league. as for valuations, the market does affect takeout prices of acquisitions. in addition, if the contracts exist, they are probably worth a great deal over lifetime, say maybe 2 billion per year in sales. i find it hard to swallow that the company would be sold for LESS that 1x sales. sure, it may not go for 2x's, but it will go for at least 1x's. not said that CG would be with customers before the end of the year, and i have heard nothing to contradict this. have you? as for the market, hell i dont know. in the past, when the big caps sold off, we would normally see a bounce in WSTL to the upside. now, we are trading with the market. actually though, on wednesday we traded opposite. could that be a sign. i agree with you on the contracts. i want to know what is happenning with them. and i have to concede that 8-9 is a possiblity. we still dont have a DMT DSLAM, but we will soon. however, the telcos arent going to drag their feet much longer. one of the reasons for the GTE ILEC delay is that they want to have enough equipment available to meet demand. this could lead us to a significant earnings suprise, and a sooner than expected deployment announcement. you have to concede that that is just as likely. good luck to all, trey