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

To: Katie Hickox who wrote (911)	1/21/1999 12:55:00 PM
From: Phuoc Le	Read Replies (2) \| Respond to of 3376

Katie, I don't personally use their products, and from reading around here, I know that you do. However, I know quite a bit about their technology and I do like the idea. However, I do question their ability to roll out this plan ASAP. As I mentioned in a previous post, in order for them to generate enough revenues to operate effectively, they need lots of customers to sign up. They're not achieving this fast enough. Pagers receiving email are all over the place now, and I expect the ability to respond to email and browse the web to come in the very near future. What will this do to MCOM? The telcos that will mostly be doing this have plenty of cash to burn. Burning cash is common for a young company, but cash is important to implement their business plan. They have stated that a shortage of cash will significantly affect their ability to enter new markets and their ability to maintain and install the Ricochet network. Personally, I believe their admission of this statement is to protect their butts in case shareholders file a classaction suit. No doubt they are in need of cash... they might already be out of working capital after Q4 of 1998... There are 3 main ways to get cash for a company: issue bonds, issue stocks, or take on loans from banks. I don't know who would buy MCOM's corporate bonds given the financial state of their company. Another public offering of stocks is unlikely considering that shareholders have negative equity in the company. Even a private placement with a group like Vulcan or a similar group won't be very likely. Of the $100 million investment by Vulcan or so, they netted $53.7 million in cash, which they burned through quick. What bank would lend them any money? If I had a bank, there are other safer companies out there to work with. Their ideas are good, but have you notice Internet kiosks in airports? This is not only in the US, but popping up around the world as well as Internet cafes. These alternative methods to keep in touch with business back home when you're travelling must be taken into account, and they're cheaper than using MCOM's network. It's a trade-off between different levels of convenience. No doubt it's nice to use a cellular modem attached to your own laptop instead of looking for an Internet kiosk or hunting for a cyber cafe, but it's just easier to drop quarters into the machine (IMO). I wish you luck on your holdings, but I'd be careful, especially about buyout rumors and the like.