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

To: Rob Prickett who wrote (4120)	1/13/1998 4:51:00 PM
From: P.T.Burnem	Read Replies (2) \| Respond to of 10227

If you can offer coherent, objective reasons why Nextel is in worse shape than the cheerleaders here (sometimes including me) think, please do so! I will be grateful, because I don't want to lose capital. 1. Nextel is overhyped by the sell-side "analysts" due to the fact that it generates a lot of investment banking business. The following is excerpted from today's thestreet.com : The sell-side was represented by a fairly prominent analyst from a very prominent firm. The comparisons were stark. For starters, I [a gentlemen whose firm manages close to $1B in assets] get paid on the performance of my stock-picking. No performance, no assets to manage, no money. Our sell-side friend said she got paid on a combination of investment banking fees , industry knowledge, the sheer amount of written output, commissions generated, verbal communication and face time with clients. Very little of her bonus was attributed to stock selection. This information was very freely offered and should be food for thought the next time you see a stock plugged. 2. Nextel is being pushed as a digital cellular company that it is not. In fact, their latest press release hardly mentions digital cellular. The truth is that Nextel is a niche (digital SMR) player. 3. Wireless infrastructure costs are primarily determined by the size of a "footprint", yet revenues are capped by the available bandwidth. Nextel's costly nationwide footprint yields only a limited amount of bandwidth (due to their narrow and non-contiguous frequency band and reliance on old TDMA-based technology) making it a high-cost provider in a highly competetive marketplace. 4. Nextel's subscriber growth is slowing down. Despite entering several new markets, Nextel's quarter-to-quarter growth was a meager 0.6% . PTB P.S. I am long Nextel with the target price of 24 3/4. I may trade in and out of the stock but would not hold it for the long haul.