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Technology Stocks : METRICOM - Wireless Data Communications -- Ignore unavailable to you. Want to Upgrade?

To: J. Ramsey who wrote (909)	1/21/1999 12:19:00 PM
From: Phuoc Le	Read Replies (3) \| Respond to of 3376

This is my first time posting to this thread, I couldn't help but respond to this message. I think it's unlikely that AOL will buy MCOM and I want people who are long on the stock to be aware of MCOM's financial situation before they hold (or buy more). For the record, I'm currently short on MCOM (only a small amount) and have been shorting it with great success since it jumped from the investment by Paul Allen's group. I think it's a great short and here's why (all info can be verified from public SEC 10-Q filings): Let's go back 3 Quarters, Q1 of 1998, 10-Q May 15, 1998: Total Revenues of $3.6 Million (Products & Services) Cost of Revenues $16.0 Million (costs for prods&serv, admin, R&D, int) IMPORTANT: *Working Capital $53.0 Million at end of Quarter Q2 of 1998, 10-Q August 12, 1998: Total Revenues of $ 4.4 Million Cost of Revenues $18.3 Million Working Capital $40.2 Million at end of Quarter NOTE: Working Capital (WC) of $40.2 at end of Q2 is approx. $53.0 (WC of Q1) - $18.3 (Cost of Revenues of Q2) + $4.4 (Revenues of Q2) On top of that, the company said: "The Company will need to raise additional funds to complete the deployment and commercialization of its current and future networks. There can be no assurance that additional funds will be available on commercially reasonable terms or at all. If such funding is not available, the Company will be forced to slow technology development and network deployment and implement additional cost-reduction measures. " Q3 of 1998, 10-Q November 13, 1998: Total Revenues of $ 4.2 Million Cost of Revenues $25.7 Million Working Capital $21.3 Million at end of Q3 $40.2 (WC at end Q2) - $25.7 (Cost of Revs Q3) + $4.2 (Revs of Q3) is approx. the $21.3 they're quoting (it's actually $18.7) The company also said: "The Company expects that it will continue to have substantial capital requirements in connection with the development and deployment of its networks and efforts to attract network subscribers. The Company also expects that, to the extent its subscriber base grows, increasingly significant capital expenditures will be required to procure modems." as well as: "The Company will need to raise additional funds to complete the deployment and commercialization of its current and future networks. There can be no assurance that additional funds will be available on commercially reasonable terms or at all. If such funding is not available, the Company will be forced to slow technology development and network deployment and implement additional cost-reduction measures." just as before. -------------------------------------------------------------------- Do we see a pattern here? These are facts that anybody can verify and draw their own conclusions and not RUMORS that MCOM can trade up to 40+ on a rumor. Draw your conclusions as you will, I've drawn mine. The company is burning cash like mad and this is including the $53.7 million net from Paul Allen's Vulcan Group private placement. The company has pretty heavy LT Debt, and NEGATIVE!!! Shareholder Equity. Don't believe it? Look for yourself. With communications technology changing so fast from cellular to digtal PCS to God knows what in the future, it seems like wasting a lot of money to develop a system that will work only with one type of technology. By the time MCOM can get enough customers to break even (who knows when that will be), the technology they're relying on will more than likely be obsolete. BTW, this whole paragraph is NOT fact, but my own thinking and opinions. In case your wondering, yes, there is a chance that AOL will outright buy MCOM just as there is a chance that the whole human race will cease to exist tomorrow because of some catastrophe, but what's the probability of that? And, a little street education for everyone out there, if I knew a rumor that good that has even a remote chance of occurring, I would buy as many shares of that stock as possible and keep my mouth shut. I wouldn't sure as hell tell the whole world. I'd rather have facts than rumors anyday, so please Jim, don't share anymore "MM talk" and I PROMISE I won't cry.