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.

Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (98)	2/24/1998 12:39:00 AM
From: Bill Harmond	Read Replies (2) \| Respond to of 4634

>>How long before you think all those households will be able to sign up. That's not the issue right now. Everyone knows that @Home only has 50,000 subscribers, and that marketable homes passed is only around 4.5 million this quarter. It's widely known that @Home probably won't break even until late next year...1999. It is true however that revenue is growing nearly 100% quarterly. Morgan Stanley estimates that @Home will increase marketable homes passed from 4.5 to 33 million in four years. Subscribers from 50,000 to 4.7 million (compared to AOL's current 11 million dial-up subscribers). But that's not my argument. Morgan Stanley is @Home's banker, and they have a 2-year price target of $30. Strange that the stock would blow robustly through Morgan's two-year price objective today on its third-highest trading volume ever, with no news. Did you see the blocks scrolling across CNBC's ticker? One didn't need a Level II screen to see the institutional buying today. This was serious, and it was a continuation of the past few sessions. So what's up? Is this money crazy? Here's my read: That promising whiz-bang cable ISP that everybody considers @Home to be is about to become something much bigger and broader. Whether or not it will happen depends on the needs and desires of AT&T. If AT&T so chooses it can become a Ma Bell again, and gain broadband reach into over half of US households, trumping the Baby Bells. All it has to do is partner (no simple negotiation) with the MSO's that own @Home (the public holders are small potatoes here), contribute (bigtime) to the build-out (something the MSO's need money for), and gain a perpetual franchise in local telephone service. No legislation necessary. What do you think AT&T will do? The Baby Bells have been delaying AT&T's practical entry into local calling by thwarting them at every junction box. This is a chance for AT&T to pull the ultimate end-run of the info age....and there's aggressive new management leading AT&T. If this scenario doesn't play out, @Home goes back to 20. If it does, the few public holders of this already-large company have a stake in the first national broadband local-exchange carrier who's pipe passes 50 million homes, and AT&T pays the freight. I wouldn't short this one. We may be adopted by Ma Bell, powered by Lucent, and configured for plug-n-play.