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

To: limtex who wrote (8637)	10/9/1998 5:24:00 PM
From: Steven Bowen	Read Replies (1) \| Respond to of 12468

Vogels comments thanks to SteveG We are adjusting our third and fourth quarter 1998 model updated for lower average revenue per line projections. We believe that our projections were overly optimistic and were impacted by two factors: -Summer Seasonality. It looks like $59 rather than $67 is a more realistic level for average revenue per line. This is the first full summer of activity for WinStar. Therefore, establishing a benchmark has been very difficult to forecast due to lack of experience. Importantly, revenue per month is marginally higher than the $58 observed in the second quarter. -RBOC Strike Impacts. We believe that WinStar's line growth was held back by workforce strikes at U S WEST and Bell Atlantic. Together, the latter factors of summer seasonality and strike impacts slowed growth in revenue to 220% from 250% previously. Our revenue estimates of $65 million and $85 million for 3Q98 and 4Q98, respectively, correspond to full-year 1998 revenues of $254 million. We are reconfirming our EBITDA loss estimates of $48 million and $47.5 million for third and fourth quarter 1998, respectively. We believe that WinStar is on track to grow access lines by 60,000 in 3Q98 and by 70,000 in 4Q98. For 1999, our new average revenue per line assumption of $68 corresponds to 109% growth of revenue at $531 million, as compared to 170% growth of $751 million previously. Our revised EBITDA loss estimate of ($120) million compares to ($98) million previously. Our new 1999 revenue estimate of $531 million assumes $68 average monthly revenue per line and our unchanged estimate of 435,000 access line additions. Sharp Ramp in Access Line Additions. WinStar is executing a sharp ramp in building out markets that continues to drive growth in access lines and revenue. WinStar is building aggressively a nationwide CLEC that in just three years will boast over 300,000 access lines, in our opinion. After 12 years of operation, Teleport had just 282,700 access lines at year-end 1997. Superior Capital Efficiency and Time-to-Market. We believe that WinStar, with its Wireless Fiber and multipoint technology, is on track to drop the incremental capital cost from $20,000 to $4,000 per on-net building connected. For fiber-based competitive local exchange carriers, capital cost per building is over $100,000 due to the need to permit, engineer and trench their networks from building to building. The latter differential gives WinStar a sustainable and superior long-term competitive advantage in reaching customers. We reiterate our BUY recommendation on WinStar shares and our target price of $97. WinStar Communications, Inc., is a national local communications company, serving customers with its Wireless Fiber sm service utilizing its preeminent 38 GHz spectrum licenses. The company plans to penetrate the local markets with a “building centric” strategy that swiftly leverages the firm's superior ability to deliver service at lower capital and operating costs faster than their fiber-based peers. With just two years of operation, WinStar has amassed the third largest array of direct building connections behind MFS/WorldCom and Teleport and the largest footprint of wireless local service capability in the country with over 1 billion channel POPs in the top 50 markets. PS The full report with tables is available in PDF format. PM me with e-mail address if anyone is interested.

To: limtex who wrote (8637)	10/9/1998 5:47:00 PM
From: Don S.Boller	Respond to of 12468

limtex: NOT QUITE SURE I AGREE - the margin was far greater in 1929 (you did day at first sight).............Lookat the leverage employed by Long Term Cap as an example...or just note the public put/call positions and the amounts of stock represented. When George Soros' boy Vic Neiderhoffer and his crowd tapped out just about one year back - the reputedly dropped $300 million.... these hedge funds make that look like "chump change" today. BWDIK Best, Don

To: limtex who wrote (8637)	10/9/1998 6:34:00 PM
From: dougjn	Read Replies (2) \| Respond to of 12468

I may sound hysterical but I'm just a bit frustrated as we all are and letting off a bit of steam here. Fair enough. <g> I think the world conditions in the 1929-30 period were worse than today in many ways, but whatever. Flows of capital facilitated by data communications today are of course vastly faster and larger, even relatively, as you point out. The 73-74 decline was a lot worse than what we've had so far. Especially if you inflation adjust, which really you have to do. What is undeniably similar to the 1929-30 period is type of economic pressure leading to the two declines. In each case it was over capacity, excess liquidity and borrowing, and a resulting deflation. And we've faced nothing like between then and now. (Though such pressures were a common source of recessions in our history before 1929.) I suspect we will end up with another 25% or so down from here in the S&P, but it will take a while, probably. As in many months. I would love it if it didn't, cause that would make life easy for me-- I'd jump back in with both feet, and stop worrying. But of course that is probably precisely why it won't move down that far that fast. Why? Because a whole lot of other people would do the same as me, and many sooner. So it will stop, for a while, sooner. Why do I say 25%? Because that would take us to the average S&P post WWII PE multiple on trailing earnings. Which is what markets tend to pay a lot more attention to in uncertain times. One can argue of course that it should go LOWER than the average, given the dimensions of the uncertainty. But we also have some things going for us. Such as a responsive fed that knows what it is doing, certainly in response to real extremes. A technology revolution lead by the U.S. that shows no signs of slowing, and which the whole world wants. One of the problems we have now that is perhaps a bit similar to 1929-32 is a rigid ideological free market stance, born of success. Then it was thought that any sort of governmental intervention in the economy was evil (socialist), and bound to fail miserably. Now it is felt, including by the centrist Clinton's lead economic team, that any sort of moderation of the naked capitalism that does currently exist between countries -- in capital flows, currency attacks, and the like, is anathema. I strongly suspect that we will have to change that view before all this is over. I think, in general, that Wofenson (sp) of the World Bank has some interesting ideas. I'm talking about his moderation of capital flows out, and into, fragile economies. Doug