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Technology Stocks : IRID - Iridium World Communications IPO Announced! -- Ignore unavailable to you. Want to Upgrade?

To: Joe Brown who wrote (1363)	2/22/1999 12:48:00 PM
From: Larry L	Read Replies (1) \| Respond to of 2693

Merrill Intra-Day Special Call: The company announced late Friday morning that the Kyocera phones have finally satisfied their testing requirements, clearing Kyocera to begin shipment of handsets into the distribution channel. The phones are performing at levels comparable to that of the Motorola phones at a call completion rate of about 94% with a dropped call rate of only about 6%. With the exception of the Kyocera phone's smaller antenna, which affects performance slightly, the performance issue for the phones has been primarily a software rather than a hardware issue. Consequently, Kyocera has already produced a total of 20,000 handsets for which the software can be updated immediately and that are ready for shipment. Because Kyocera has not been manufacturing phones steadily until performance issues were resolved, however, it is likely that additional Kyocera handsets made this quarter won't reach subscribers until next quarter. As it ramps up, initial production rates for Kyocera will be slow, but should approach 1,000 per day by the 2nd quarter, the rate at which Motorola is currently producing. - With 140,000 qualified leads and 18,000 paid deposits, releasing the Kyocera phones is good news for the company in our opinion, as it resolves final concerns on the supply side regarding the company's ability to meet pent up demand. With the 35,000 phones Motorola had shipped by the end of the year, Kyocer's 20,000 phones in inventory, and Motorola's current production rate of 1,000 phones per day, the company should be more than able to satisfy all deposit paying customers, plus a significant number of qualified leads that turn into orders. As we pointed out in the past, we believe Iridium offers risk-tolerant investors a potential high-risk, high-return opportunity. If Iridium substantially exceeds subscriber projections, the stock should perform well, while subscriber shortfalls could lead to price declines. If the company fills all initial orders, it should place them close to meeting our 50,000 Q1 forecans and the bank covenant minimum of 52,000. However, if they were to miss the bank covenant regarding minimum subscribers or the separate covenant on minimum revenue levels, we do not believe it would have any significant operating consequences. The primary impact of missing a covenant would be limited to the company having to seek a waiver and possibly pay higher financing expenses. We intend to focus on subscriber end-usage levels as they relate to achieving the company's long-term business objectives. One U.S. service provider, Motorola Cellular Services also recently reduced the retail price of the Iridium phone. This should stimulate subscriber adoption. - We will look to major contract announcements in the interim and to actual Q1 results to guage demand and the comnpany's ability to meet subscriber projections for the balance of the year. We are maintaining our intermediate Accumulate and long-term Buy on Iridium.

To: Joe Brown who wrote (1363)	2/23/1999 8:09:00 PM
From: Dennis R. Duke	Read Replies (1) \| Respond to of 2693

Humm, the same Merrill Lynch recommendation was made at $44ish and my broker recommended it at $47ish. Isn't ML good at calling this stock??? Sorry, Jack, I bailed at $32 and can't come back for 30 days, and then I need the DD sector to get back on its feet to have capital....:-(. Hope this one turns around. It got coverage on CNBC in a mixed light. So I can't really tell where the market will take it. Still interested, but watching for now.... Later, (-8 Dennis 8-)