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Technology Stocks : OMPT!!! -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (314)	1/6/1999 6:55:00 PM
From: Jules Shear	Read Replies (2) \| Respond to of 531

I take #4 to mean the fourth stongest brand in the cellular/PCS market. The cellular incumbants are #1 and #2. #3 is usually the "big name" PCS 1.9GHz carrier (Sprint, AT&T, etc.) and the local GSM carrier (Omnipoint, Aerial, etc.) is the #4 carrier. So for example, if you asked customers in NYCity to rank the brands of the wireless carriers, my guess is that #1AT&T, #2 Bell Atlantic #3 Sprint and #4 Omnipoint and probably a distant #5 would be Nextel. I am very bullish on this stock. It has been suffering for a few reasons. 1) No CFO. Not good with overall concerns about future financing, huge current EPS losses, and a company trying to negotiate a strategic investment. I hear this will be solved soon. 2) Poor back-office execution with resellers, prepaid, counting customers correctly, customer service, etc. 3) It is doing business in NYC which puts it in "the spotlight" of Wall St. So mistakes are magnified that PTEL, WWCA, AERL, etc. might be able to get away with less notice. 4) Disappointing customer adds for 2Q and 3Q 97- partly due to #2. One of it's major distributors (The Wiz) is closing stores. 5) Glut of wireless stocks. Recent IPO of Sprint PCS, talk of AERL changing equity structure, WWCA talking of splitting into two wireless companies, QCOM spinoff of LWIN, etc. have created more demand for people looking for pure wireless plays. Combined with bad news from #1, #2, and #4 above this makes it easy to move $$ away from OMPT. 6) Huge pressure from short sellers. I have never seen so much short interest on a stock like OMPT (as a % of total outstanding shares) However, I have heard OMPT had a good 4Q of net adds. If this is true and they are successful in announcing a big telecom strategic investor-this stock will be back in the mid teens in no time. Because of the huge short positions, announcement of good news will create short squeeze that could be good for longs. Although this is not worth "betting" on, my opinion is that the long-term fundamentals for this company are legitimate (given that they recently announced more financing). But this stock is not for those who have short-term risk aversion- Lots of volatility.. But for those who have risk tolerance-the rewards will be great because fundamentally the GSM licenses for the major east coast cities are worth more $8 share (independent of built-out network value and existing customer value) However, more bad news could send the stock temporarily reeling(back to $6-$8) which would make me refresh my position.