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

To: Steven Bowen who wrote (10080)	1/20/1999 9:23:00 AM
From: gabor boda	Read Replies (1) \| Respond to of 12468

I thought that I would also provide my thoughts on the current situation. 1. the market for the foreseeable future looks very strong. a. MSFT and other software, tech and internet players are coming out with stronger than expected earnings. b. If the president even remotely gets his way on the issue of the govt buy into the market....very positive. c. The whole wireless sector, CLECS et al, are coming into favor. d. World economies are heading in a positive direction. 2. WCII is in an amazingly strong position due to the soundness of the company and its future plans. 3. The very voluminous short position is now vulnerable and I think that we will very shortly start seeing the result of that vulnerability.

To: Steven Bowen who wrote (10080)	1/21/1999 2:08:00 AM
From: SteveG	Respond to of 12468

Oops, almost missed a response to your question.. <..There was much talk during the collapse of Long Term Capital that they were heavy into these, and maybe it wasn't a coincidence that WinStar collapsed to 10 at the same time...> I understand that LTCM was in fact long the common (along with a good number of other CLECs), and as part of the required unwinding of their positions, at the depths of the LTCM catalyzed selloff, WCII hit it's bottom. They may ALSO have been involved in the bonds - heard rumor they were, but nothing confirmatory. <.. My thought is that maybe these have been traded around such that Morgan Stanley, or any of their customers, have nothing to do with them anymore...> I would think the trading involved holding converts for the yield and shorting the common around them for riskless trading profits. <..And certainly they may not be held in such a huge block that manipulation would be possible..> Not sure what you mean by manipulation. Anyone buying or selling enough stock can "manipulate" the stock price. What's the bond worth now ($75MM at 14% since '95)? $126MM or about 6.1MM shares? I'd say that is enough to "manipulate" the stock price. They certainly aren't all held one entity, but the game dynamic is the same regardless. <..or the profit potential large enough to warrant manipulation...> IMO, the profit has been more in shaking weak hands out of the common then covering. Keeping the 14% longer is just a kicker. I think with the renewed street interest, this will be tougher to do. <..My theory is also that most of the 5 million shares these will convert into were shorted during the last assault on this level, such that more shorting can't happen now...> But how much of the previous short has been covered on the way up? The short interest may stay relatively constant, but the pool of shorts may rotate in and out. <..I guess my bottom line is I don't expect the convertibles to be as much of a factor this go around. Any thoughts? ..> I think they still are a factor. Any convert will exert this kind of pressure. The more recent 8% converts have likely also been shorted. It's part of the game. Those are MY thoughts, anyway, for whatever it's worth. Steve