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

To: Jason Cogan who wrote (8167)	9/4/1998 7:04:00 PM
From: DavesM	Read Replies (1) \| Respond to of 12468

Jason, You emphasize being a conservative investor. Conservative investors sell naked calls? WCII is a utility company not a software company. When earnings become positive, analysts expect well over $1 B in revenue. And these revenue figures are considered to be reach able for year 2000. Revenue has gone from $79M all 1997, to $57M 2ndQ 1998 (total revenue for quarters 1&2 $104.7M- est 1998 $276M). Finially I doubt a GE would give ANY compamy its exclusive telecommunications business. I don't even think that IBM's telecommunications division (top rated in the industry), has all of IBM's telecom business.

To: Jason Cogan who wrote (8167)	9/6/1998 8:32:00 AM
From: Gary Kline	Respond to of 12468

Jason, Totally understandable for conservative investors not to place money in this stock. There are possibly hundreds of more conservative companies with very reliable cash flows. However, I would be very reluctant to play the short side for the following reasons: 1) Analyst or Brokerage End of Year Targets: SSB $64 ($300-2001) NBMO $97 Jeffries $61 CSFB $61 GS $44 Perhaps they are all wrong. 2) Execution of proposed Business Plan: -26 switches in the top 30 markets; third behind WCOM and TCGI -installed 10% of all national CLEC lines last quarter -has 195,000 lines in service: 120,000 CLEC lines 70,000 on-switch, 30,000 on-net-wireless -Hubs by year end may be >100, hopefully closer to 125; CEO expresses plan to deploy P-MP in 1999 thus cut expenses per bldg. from $20,000 to $4,000 Perhaps you can argue they are falling behind on the number of hubs or the percentage on-net, but having the perspective of watching the last 3 years they seem to this shareholder to be executing. 3) Target Market is small to midsize businesses, currently a $7.1 billion dollar segment-without the data and internet revenues included. WCII will capture a significant percentage of this market. 4) Projected Revenues and EBIDTA (Vogel's numbers) Revenue: EBIDTA 1996: 48.6M 1998: (193M) 1997: 79.6M 1999: (97M) 1998E: 276.6M 2000: 125M 1999E: 751.4M 2001: 381M 2002: 559M 5) Debt payments start in 2004, with the first year 250 million owed seems not significant if revenue stream as projected is on target. For these above reasons WCII has a good business plan and is executing to date. In Warren Buffet's Berkshire Hathaway Chairman Letter this year he talks about Ted Williams book The Science of Hitting and extrapolating to business pitches. Ted wrote that the strike zone could be divided into 77 cells, but that to hit .400 he could only swing at balls in his best cells. Jason, Warren would never invest in WCII at this early phase of its operations. But this business pitch seems right down the plate where with the right wind and swing I could ..... it's going, it's going .... Regards, Gary