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Technology Stocks : CellularVision (CVUS): 2-way LMDS wireless cable. -- Ignore unavailable to you. Want to Upgrade?

To: Brian Coakley who wrote (811)	1/5/1998 3:33:00 PM
From: Bernard Levy	Read Replies (2) \| Respond to of 2063

WCII has valuable licenses, but its debt is extremely large (in fact its book value/sh is less than CVUS's). I think that WCII shareholders are too optimistic about the prospect they will be bought out by AT&T. They are looking too much at the takeover from a WCII perspective. They should look at it also from an AT&T perspective: a) Because WCII has such a high cash burn, AT&T can afford to be patient and wait until WCII's cash starts to run low. I think that the $60 /sh takeover estimates are way too optimistic. Is AT&T plays its card rights, we could see a revisit of the mid- to high-teens for WCII's share price, followed by a takeover in the $25 to $35 range. A high takeover price would be difficult to sell to AT&T shareholders. b) The WCII-AT&T match is not perfect. WCII targets primarily small or medium size businesses as customers, but this is a group which tends to use MCI and Sprint for long distance service. By opposition, AT&T tends to be strong with residential customers. If the idea is to bundle short- and long-distance services, AT&T needs to buy out a wireless company which targets residential customers. In spite of the above comments, I agree that WCII is better managed and with a sharper strategic vision than CVUS. However, its debt burden and heavy cost of operations are serious negatives.