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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: steve s who wrote (15068)	2/6/1999 9:17:00 PM
From: steve s	Respond to of 21342

Interesting read from Yahoo's thread,..... The end is near.... by: agm_ny 4964 of 4965I have been following Westell since 1996 after it lost the Joint Procurement Contract (JPC). I have bought some shares back in November 1996 and as recently as September 1998. My average cost is around $10.50 . I have listen to every Conference call the company had since then, attended a couple of presentation the company had in New York City and read most article on the Yahoo message board and on Silicon Investor board. My initial decision to invest in Westell was based on 3 reasons: 1) I strongly believed and still believe that ADSL will be part of the last mile solution. 2) Westell had 80% of the test market and from my reading and research it worked wonderfully. 3) Westell had 2 big investor the Penny and Simon Families which have deep pocket. Below are Westell's ADSL revenue from Dec 96 to the most recent quarter (number are in Million) June Sept Dec March Year Total 2.168 1.190 1996/1997 8.666 1.500 3.924 3.965 3.023 1997/1998 12.412 3.395 2.936 2.763 1998/1999 9.094 As we can all see, Dec 1997 was the best month Westell had in ADSL. Since then, revenue have been going down sequentially (June 1998 was probably an abberation). The last two quarter include the initial deployement of Bell Atlantic. From Westell Sept 98 result press release we find: "These gains were offset in part by a DECREASE in DSL REVENUES of $988,000 due to LOWER UNIT SHIPMENTS resulting from an uneven ramp-up in system orders." From Westell Dec 98 result press release we find: "These gains were reduced in part by a DECREASE in DSL REVENUES of $1.2 million, due to lower average sales prices and, to a lesser extent, LOWER UNIT SHIPMENTS." In the meantine other ADSL player like Aware and Orckit have had ADSL sequential revenue growth for the last 3 quarters. I have looked closely at Orckit since like Westell they are part of the initial deployment of ADSL with a big RBOC. A quick look at Orckit latest result shows that "Revenues from ADSL in 1998 increased more than tenfold compared to revenues from ADSL in 1997" My conclusion is that Westell had more revenue during the Test period of ADSL and is unable to secure any meaningfull contract to ramp up their ADSL revenue. I admit to have been suckered, like most of you, by Gary Seamans's 3 contracts, optimism and promisses. The Bell Atlantic deployment is not showing on the bottom line neither any of the announced one like GTE CLEC, GTE goverment, BC or any of the small ones like the commercial real estate space in Chicago. I have decided to hold on my invesment until the end of this quarter. Westell currently has 15 million in cash on their balance sheet and burn around 10 million every quarter. They will have to raise money this quarter and the term of the financing will shed the light to the future of Westell. If no financing is done by then, I suspect that the ADSL story for Westell will be over. If they don't raise the money this quarter, their auditors will diclose a "going concern" on their 10-K and no one in his right mind will want to have a "going concern" on his audited results. Actually no one in his right mind will let the cash position go so low compare to the burn rate. Dr. Tech of SI has claimed that the financing is secured and Westell is waiting for a better stock price to disclose it. I don't beleive in his argument since who ever is investing in Westell will want to close the financing ASAP to secure a lower conversion price (assuming the price will move higher because of impending news). Conclusion: March is around the corner. The financing is due, ADSL revenue for this quarter should be north of 4 million otherwise we are all waisting our time. Good luck to all. Anyone who has posting access on SI please feel free to post my note their. ------------------------------------------------------------------------ Posted: Feb 6 1999 8:20PM EST as a reply to: Msg 1 by YahooFinance Replies: View Replies to this Message