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: Alejandro who wrote (5673)	5/2/1998 10:05:00 PM
From: James Fink	Respond to of 12468

<<I never invest in an equity if I have to worry about bookvalue and liquidation and the amount of preferred who would have first claim. I do look at long term debt.>> Then why have you invested in WinStar? With WinStar, you have to worry about all the things you mention above.

To: Alejandro who wrote (5673)	5/2/1998 11:13:00 PM
From: Jason Cogan	Read Replies (3) \| Respond to of 12468

Ali; <<Jason: You are correct that others would be paid before the shareholders. However, this would only happen in liquidation.>> Not true. Debtholders always rank senior to shareholders, and have priority for their cash flow. It's kind of a question of semantics, but I prefer to look at the true nature of the liability. It will be difficult if not impossible for equity holders to take out cash flow from the company without first retiring the existing debt holders. New debt holders might replace them, which is another story. But one way or another, probably from cash flow, the existing debt holders will be paid first. This is why I say the first $2 billion of cash flow is already spoken for. Regards, JC