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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: Steven Bowen who wrote (3744)	2/6/1998 11:23:00 PM
From: Kingpin	Read Replies (1) \| Respond to of 12468

TA DA! Thanks for the simple solution Steve. It looks a little jumbled. WinStar Communications (NASDAQ-WCII) PRICE 52-WEEK EPS - (FY Dec) P/E RATIO DIV SHRS MKT CAP LT DEBT INV./RISK TARGET 2/5/98 PRICE RANGE 1996A 1997E 1998E 1997E 1998E YIELD OUT(M) $M TO CAP RATINGS PRICE $37 1/8 $38-$10 ($3.00) ($7.66) ($11.40) NM NM - 33.2 $1,228 106% O/4 $40 Raising Price Targets on WinStar and Teligent ú We believe WinStar takeover rumors are premature ú LMDS auction dynamics favorable for WinStar ú Raising price targets for WinStar and Teligent to $40 and $34, respectively We have spoken with WinStar as well as logical suitors and do not believe that a major alliance or merger is imminent. As outlined in our February 4 note, we believe the large telecom players that need broadband access capabilities will likely wait until commercial service is widely available before committing to a specific broadband wireless service provider. WinStar currently offers service in 10 markets and it expects to serve the top 30 markets by the end of 1998. Teligent is currently testing multipoint broadband wireless service in three markets and plans to commercialize 10 markets by the end of this year. Additionally, the FCC will commence the LMDS auctions of additional broadband wireless spectrum on February 18. While the absence of a major deal in the near-term may disappoint some investors, we believe the LMDS auction dynamics will enhance the value of WinStar and Teligent. It looks increasingly unlikely that another national broadband wireless service provider will emerge from the LMDS auctions considering that: 1. The nation is being carved up into 493 basic trading areas (BTAs) for the purpose of licensing. 2. Approximately 150 bidders have filed to participate in the auctions. 3. Small businesses will receive up to 45% bidding credits. 4. CellularVision, which in our view does not have the resources to go national, already has the NY license by virtue of its pioneering work in broadband wireless services. In our opinion, it will be very difficult, and perhaps prohibitively expensive, to piece together a national footprint under these circumstances. We believe that the failure of a national competitor to emerge from the auctions bodes well for the valuation of WinStar and Teligent. Such a scenario makes their national footprints, amassed prior to the advent of auctions, more dear. The large long distance carriers are the most in need of local connections, and we believe they would strongly prefer to obtain them from a single relationship utilizing a single set of systems rather than stitching together a quilt of smaller partners across the country. We also believe that yesterday's FCC rejection of petitions to allow incumbent LECs and cable companies to hold LMDS licenses in their franchised territories further benefits WinStar and Teligent. In our view, this makes it more likely that the LECs with national ambitions such as Bell Atlantic, SBC, and GTE are even more likely to be interested in WinStar and Teligent. Based upon the improved outlook for WinStar and Teligent, we are raising their price targets to $40 and $34 per share, respectively. Jack Reagan Legg Mason Wood Walker, Inc. February 6, 1998 (410) 539-0000 ext. 5147 Investment Rating: B-Buy O-Outperform M-Market Performance U-Underperform Risk Rating: 1-Low Risk 2-Average 3-Above Average 4-Speculative

To: Steven Bowen who wrote (3744)	2/6/1998 11:26:00 PM
From: Kingpin	Respond to of 12468

WinStar Communications (NASDAQ-WCII) PRICE 52-WEEK EPS - (FY Dec) P/E RATIO DIV SHRS MKT CAP LT DEBT INV./RISK TARGET 2/5/98 PRICE RANGE 1996A 1997E 1998E 1997E 1998E YIELD OUT(M) $M TO CAP RATINGS PRICE $37 1/8 $38-$10 ($3.00) ($7.66) ($11.40) NM NM - 33.2 $1,228 106% O/4 $40 Raising Price Targets on WinStar and Teligent ú We believe WinStar takeover rumors are premature ú LMDS auction dynamics favorable for WinStar ú Raising price targets for WinStar and Teligent to $40 and $34, respectively We have spoken with WinStar as well as logical suitors and do not believe that a major alliance or merger is imminent. As outlined in our February 4 note, we believe the large telecom players that need broadband access capabilities will likely wait until commercial service is widely available before committing to a specific broadband wireless service provider. WinStar currently offers service in 10 markets and it expects to serve the top 30 markets by the end of 1998. Teligent is currently testing multipoint broadband wireless service in three markets and plans to commercialize 10 markets by the end of this year. Additionally, the FCC will commence the LMDS auctions of additional broadband wireless spectrum on February 18. While the absence of a major deal in the near-term may disappoint some investors, we believe the LMDS auction dynamics will enhance the value of WinStar and Teligent. It looks increasingly unlikely that another national broadband wireless service provider will emerge from the LMDS auctions considering that: 1. The nation is being carved up into 493 basic trading areas (BTAs) for the purpose of licensing. 2. Approximately 150 bidders have filed to participate in the auctions. 3. Small businesses will receive up to 45% bidding credits. 4. CellularVision, which in our view does not have the resources to go national, already has the NY license by virtue of its pioneering work in broadband wireless services. In our opinion, it will be very difficult, and perhaps prohibitively expensive, to piece together a national footprint under these circumstances. We believe that the failure of a national competitor to emerge from the auctions bodes well for the valuation of WinStar and Teligent. Such a scenario makes their national footprints, amassed prior to the advent of auctions, more dear. The large long distance carriers are the most in need of local connections, and we believe they would strongly prefer to obtain them from a single relationship utilizing a single set of systems rather than stitching together a quilt of smaller partners across the country. We also believe that yesterday's FCC rejection of petitions to allow incumbent LECs and cable companies to hold LMDS licenses in their franchised territories further benefits WinStar and Teligent. In our view, this makes it more likely that the LECs with national ambitions such as Bell Atlantic, SBC, and GTE are even more likely to be interested in WinStar and Teligent. Based upon the improved outlook for WinStar and Teligent, we are raising their price targets to $40 and $34 per share, respectively. Jack Reagan Legg Mason Wood Walker, Inc. February 6, 1998 (410) 539-0000 ext. 5147 Investment Rating: B-Buy O-Outperform M-Market Performance U-Underperform Risk Rating: 1-Low Risk 2-Average 3-Above Average 4-Speculative