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

To: SteveG who wrote (8064)	9/1/1998 6:20:00 PM
From: Bernard Levy	Read Replies (2) \| Respond to of 12468

Hi Steve To complement your point to SW, stocks do not trade at the mean estimate of their future earnings, which would be risk-neutral.Investors also throw in a risk aversion factor, typically measured by the standard deviation of fluctuations around the mean, to gain a margin of safety. In other words, a stock which operates in a very predictable environment will trade higher than one which operates in a highly changing market, even if both of them have the same value for their future discounted earnings. I do not view this as a technical or psychological factor. It is totally rational that investors should take in account the possible risk of something terribly wrong happening, which is obviously larger for WCII than for say, a toothpaste company. With respect to being able to obtain junk bond financing, I am really surprised that so many analysts seem to think that sound CLECs would find it difficult to obtain such financing. The US economy was not looking particularly rosy in the 90-93 time frame. Yet, didn't WCII get its first junk bond deal around 92 or 93? I do not see how 99 or 2000 will be so different, particularly since the company is much stronger now. Best regards, Bernard Levy

To: SteveG who wrote (8064)	9/1/1998 6:34:00 PM
From: limtex	Read Replies (3) \| Respond to of 12468

Steve - Does there really exist anywhere an absolute science of valuation. DCF and other technicals are I suppose one way and maybe valid but in my view even more valid is how much a third party would pay for the business. Now what is WCII worth to a potential buyer say a Deutsche Telekom for instance. How much is it worth to bypass the need for years of building a state of the art national wireless network in the biggest market in the World? Just a thought. Regards, L