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Technology Stocks : MindSpring Enterprises (MSPG) Another ISP. -- Ignore unavailable to you. Want to Upgrade?

To: Mr Bones who wrote (318)	7/21/1998 10:21:00 PM
From: Rodney Glover	Read Replies (1) \| Respond to of 1434

MSPG is going DOWN...everyone is expecting MSPG will post .18 or better. I calculate MSPG missing by at least .03...meeting .18 THIS quarter will be a surprise to me! But what do I know ...do your own calculations, if you can't, then follow the analyst.

To: Mr Bones who wrote (318)	7/27/1998 9:45:00 PM
From: Sauron	Respond to of 1434

Consider the position of a Bell company under the prospective rule which the FCC will put forward on Aug 6. If you are BLS and can deploy DSL through an unregulated subsidiary you will be a monopolist to the vast majority of potential subscribers. Only in central offices which serve predominantly business will CLECs be able to justify the cost of collocating DSL equipment. Thus MSPG and the other dialup ISPs will be dependent on getting commercial wholesale terms from a monopolist who has no legal obligation to wholesale the service and who has practically no facilities based competitors to sell DSL as a service to MSPG. Further, the cable operators have no unbundling requirement which would force them to wholesale cable modem service to ISPs. Given that TWX/UMG own Roadrunner and T/TCOMA and other MSOs own most of @Home, it's hard to envision their being accommodating wholesalers. In addition, to keep cost of subscriber acquisition/support low, an ISP like MSPG needs to be able to offer products which are ubiquitously available. Dialup allowed this. The future doesn't look so certain. At 15x revenues MSPG looks like a dangerously overvalued stock with serious business and regulatory risk. Bear in mind that MSPG thought $53 (presplit) was a good price to sell stock just weeks ago. Revisiting that level would mean a 66% decline from present levels. Hmmmm!