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

To: Kenneth Goodman who wrote (5504)	4/27/1998 12:24:00 PM
From: Steven Bowen	Read Replies (3) \| Respond to of 12468

Hi Ken, welcome. I think everyone agrees with you about the need to examine the bear case. Unfortunately what we've received here doesn't amount to one. "However, that doesn't mean that some institutions and hedge funds aren't using the same though process to decide on taking a long or short position." I guarantee you that institutions use exactly Jason's arguements as reasons not to buy WinStar. But that doesn't make it a bear case, it's just riskier than most funds can tolerate. I'd give Jason that all his points make WinStar a risky stock. As long as he realizes the risk-reward relationship, and realizes that everyone here has examined the risk, is comfortable with the risk, and expects to be well rewarded for our risks. If I didn't like the high risk, I'd buy Worldcom and take 25 - 50% a year. I like making several times my money a year, and therefore am willing to take more risk. I hope Jason realizes that just because it's a risky stock doesn't mean it won't be very successful. Maybe Jason can't handle risk and doesn't sleep well at night with a stock like WinStar in his portfolio. If so, that's a good enough reason for him to not buy WinStar. Of course if he couldn't sleep being long WinStar, how the heck would you ever sleep being short WinStar. That's more risk than even I could handle.

To: Kenneth Goodman who wrote (5504)	4/27/1998 1:23:00 PM
From: Harley Scott	Respond to of 12468

Ken, Biggest risk to WinStar IMHO is category risk. WinStar can look great when compared to other CLECs in terms of management, growth rate, cost structure, access to capital, valuation, and takeover potential. The question is whether the market will decide that CLECs as a category are overvalued. The underlying premise is that one way or another, the RBOCs are going to lose market share, particularly at the high end. In order to justify the market caps of the CLEC category as a whole, you must buy this assumption. The factors which are expected to contribute to this -- regulatory advantages, cost advantages, marketing advantages -- are all subject to change.