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.

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

To: Steven Bowen who wrote (5456)	4/26/1998 12:18:00 AM
From: pkwknk	Read Replies (2) \| Respond to of 12468

..Steve B, respect your patience and methodical destruction of Cogan's arguments, but i believe my analysis succinctly summarizes his actions---self serving, verbose, double talk, ' a little knowledge is a dangerous thing', etc, etc....those on this thread I dont believe are a cheering squad, they just have done a lot of homework....this guy comes along and with very little constructive insight, and with many erroneous assumptions ( $20/ mo bill !!!!!!!! for business customers) tries to plant the bear story...idiots like this just are a bore and a waste of time..give me some real meaty bear story, and I'd be glad to listen/learn...this guy definitely aint it...

To: Steven Bowen who wrote (5456)	4/26/1998 1:22:00 AM
From: Jason Cogan	Read Replies (4) \| Respond to of 12468

Steve: I must say I was very impressed with your first post, but then you went off and started name calling again. I thought we had gotten past that. <<"If the average communications bill was $20/month on average,..." $20 a month, give me a break. WinStar is targeting small, medium, and now large companies>> I apologize for being unclear in my estimates. Let me try again. When I used $20 a month, I made a rough of estimate of cost per consumer. Of course buildings and companies aggregate access and purchase it in bulk. But ultimately, they're buying access for their employees. As such, purchasing decisions are made on a cost per employee basis. I thought I was being generous allocating $20 per consumer per month, since this is approximately the current cost for any communications service. Again, don't jump down my throat. I'm just making an estimate based on cable, local telephone, ISP access costs etc. If anything, when businesses buy in bulk, they're probably looking for a substantial discount to the $20 norm. So again, at $5 billion in revenue, that averages to 20 million monthly customers. Or about one sixth of the workforce. Seems like a lot. There is one other point that keeps getting misunderstood. I'd much rather have discussions about relative technology strengths, willingness to convert to wireless, and other industry related concerns. But despite the claims of "do your own homework" on this thread, it seems like I'm the only one doing any financial homework at all. I will try to respond to your other claims in a later post, but this one keeps getting brought up, and needs attention now. I hate to capitalize, but in this case its warranted. WINSTAR DOES NOT HAVE 1 BILLION DOLLARS IN THE BANK Read the 10-K if you don't believe me. I'm not making this up. On page F-7 of the 10-K, it shows cash as $417 million. Not $1 billion. You guys keep getting this confused. Other assets are questionable, but they are listed as $280 million, for a total of approx $700 million in assets. I frankly have no idea how to depreciate wireless equipment, and I'm sure the Winstar boys don't either. So let's take them at their word. $700 million of assets. That's the good news. On the liability side, It reports over $790 million of debt, although if you take the fair value as listed in Table 8 of the 10-K, its more like $985. Add in the $175 of preferred equity, which is really debt as far as the common stockholders are concerned, and you get to approx 1.2 billion. Net net, common stockholders are in the hole $500 million (1,200 - 700 for those of you who'd like the math. Why do you think Yahoo's Price to Book Ratio is NA. Tough to calculate a ratio when you have negative book value. As for a company surviving when it has debt, of course its possible. Time Warner has limped along for years with a crushing amount of debt. But remember, they still have cash flow, and positive net worth. Most companies that take on debt for acquisitions and expansion still have positive equity values. This is the first time I've ever seen a company with this much negative book value. Essentially, if they closed up shop right now, not only would you get nothing, but you'd each owe over $10 per share. That's what I mean by negative book value. As long as we're on accounting issues, here's another one to take into account. Current option grants outstanding are for over 11.5 million shares, with an average exercise price of $13. At today's $38 stock price, that's another $290 million in outstanding compensation ahead of the stockholders. None of this is reflected in the current owner's equity section. When you're already in the hole $500 million, why bother to show the true picture? Add it all up, and the stockholders are about $800 million in the hole, and the losses keep piling up. Are you still so sure your shares are worth $38 apiece? Before you guys start with another round of name calling, why don't we spend a little time on meaningless things like financial statements. If you guys like, you can always start another round of cheerleading later. Regards, Jason Cogan