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

To: wonk who wrote (10099)	1/21/1999 12:28:00 AM
From: Steven Bowen	Read Replies (2) \| Respond to of 12468

WW, "I do not believe there was any active collusion between WNP and Nextband." Couple points; "WNP in the first round had bid $135 million #reply-3469424 using almost all (if memory serves) their bid units." In the major cities (population over 1,000,000 pops), the bidding credit used was 0.9*pops. The minimum bid was $2.25 per pop. Therefore the ratio of dollars bid to bidding credit used was at least 2.5 (2.25/.9). Therefore for WNP to have placed minimum bids of $135M, they would have only used up $54M out of their $100M credit. The fact I posted yesterday that by the end of the auction both WNP and Nextband had forfeited $20M in bidding credit would lead me to believe that it's a pretty safe assumption that WNP never used more than $80M of their credit in any one round. It would be pretty time consuming to prove this, but if they only used up $80M in the final round, they probably didn't go over that in an earlier round. Since it would have taken only $18.5M in bidding credit to overbid Nextband in all of their major West Coast A-block cities (ie LA, Portland, Sacramento, and Seattle), WNP definitely had the bidding credit availability. So I don't think is reasonable to use the available bidding credits as an excuse for the lack of competition. Both WNP and Nextband had registered to bid in every market, and they both had $20M in bidding credits they didn't use. "I happen to believe, at least for WNP, that they were capital constrained." Could be true, but I'd find it extremely hard to believe. Remember, the auction brought in only about one tenth of what was expected. When WNP was planning their strategy, I can't believe they thought they'd show up and only spend $186M. To be any kind of major player, I'd think they would have thought they may have to spend at least $500M to $1B. Spending only $186 seems pretty cheap to me.

To: wonk who wrote (10099)	1/21/1999 1:17:00 AM
From: MangoBoy	Respond to of 12468

<< Finally, the very structure of Nextband argues to the conclusion that this was no pre-arranged deal with Craig McCaw. Why go to the trouble of setting up a JV between Nextlink and Nextel? At first blush, the structure seemed to say that -- individually -- both Dan Akerson and Wayne Perry - had gone to Craig saying "this spectrum looks interesting. Given what had happened in the last auction, WCS, perhaps we can pick up some bargains." Craig, not wanting to have his senior lieutenants fighting among themselves in an auction room, put them in a JV. >> i think McCaw was just using Nextel's financial strength to raise capital, just as he did when the LVLT fiber purchase deal (INTERNEXT) was announced. did you know that, without public fanfare, Nextel is no longer part of INTERNEXT? it's now a straight 50-50 deal between Nextlink and McCaw's Eagle River Investments.