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

To: Jason Cogan who wrote (5449)	4/25/1998 11:36:00 PM
From: Steven Bowen	Read Replies (1) \| Respond to of 12468

Hi Jason, just a few comments; "1. Most importantly, your entire analysis rests on the validity of Vogel's and other analyst numbers." Very true and important. However it's not totally blind faith. Remember most here have followed WinStar for 3 or more years. I believe, if anything, analyst keep upping their numbers as WinStar consistantly beats them, and as WinStar rolls out ahead of projection and technology improves faster than predicted. "Are you really that certain that a revenue stream will go from $40 million to $30 billion over the next 10 years?" No, my table showed revenue going from $79M last year, to $283M this year, to $5.5B in 2006. The $30B was the cumulative revenue generated over the next ten years. "2. You assume that margins for telecommunications services will stay where they are." Sorry, I did make it sound that way. 65% margin is where they are at today with a building on-net. I'm sure Vogels model that I took the numbers from does not assume they stay the same for the next ten years. Remember, Vogel is very smart in this field. "The competition for connecting people is everywhere, from the Internet providers to the CLECs, to the RBOCs." You failed to comment on one of my earlier points where I pointed out that of the 700,000 office buildings in the US, it is unprofitable for any wired broadband company to reach 2/3's of these buildings. At only $4,000 per building for WinStar vs $100,000 for their wired competition, economics are very much in WinStar's favor. "3. You assume that even if the future is so bright for Winstar, they will have enough money to stay the course." WinStar should be fully funded currently thru positive cash flow. "Currently, Winstar is running out of money." Nor sure what you mean. They just completed a major funding package (at 7%). They currently have $1B in the bank. You have to realize the reaction you're getting isn't just because of you. Most of us here have followed every move of this company for years, and in that time we've had dozens stop by here just like you wondering "why would I buy a stupid company that's losing money?", and that's all they know or all they really ever take the time to learn. Nothing of the fundamentals or the technology or the management, etc. They expect us to disrupt this thread for days on end, answering the same old questions over again, just like people have done for you now, for about the 15th time now that those same questions have been answered. Maybe you can kind of understand peoples shortness. OK, now give me this; take the revenues estimated by Vogel in my last post, and I'll give you his earnings projections (again, in millions). 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 EBITDA (192) (98) 125 380 556 787 1069 1361 1676 2046 Net Inc (388) (306) (88) 184 371 609 893 1184 1494 1857 Now, to start with, let's assume all of Vogel's guesses, estimations, projections, and assumptions are right. Tell me how you'd value the stock from now thru the next six years or so. And tell me where along that curve you think would be the best time to buy in. Then tell me what you'd pay to buy a company with these earnings and growth. And then from this starting point, we can argue where Vogels assumptions go wrong. Maybe from this basis we'd have a good starting point for a good discourse of disagreeing.