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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..] -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (143)	5/6/1999 12:42:00 AM
From: SteveG	Respond to of 1860

Governali on CSFB Broadband Conference CSFB Broadband Conference Observations & Summary Broad band will end up being deployed more pervasively, because competition will end up being fiercer and drive all the players to step up the pace of investment. The demand for broad band will fill supply (both local and long distance) because pricing will fall which will stimulate demand and the creation of new applications. Technology won't be the differentiating factor of success- effective execution is the key. The capabilities of various broadband technologies are not sufficiently different to secure commanding leads. ILECs will become more aggressive than they're public pronouncements suggest at the moment. Fear of dilution and the need for efficient provisioning constrains their current efforts. But we think competition will change this, and more aggressive plans will evolve. The consolidating cable industry is well prepared to aggressively compete for telco business because AT&T's leadership and the market's willingness to apply high valuations with an EBITDA focus gives the industry great freedom of action.

To: SteveG who wrote (143)	5/6/1999 12:45:00 AM
From: SteveG	Respond to of 1860

BS's Vijay Jayant on LOR's satellite failure: Loral Space & Communications Limited (LOR - $19) - Buy Loral's Orion 3 Satellite Fails to Reach Final Orbit Impact on Valuation is $0.50-$0.75 per Share _________________________________________________________________ * On the night of May 4th, Loral's Orion 3 satellite failed to reach the proper transfer orbit due to a failure in the second stage of the Boeing Delta 3 rocket. * The valuation impact, assuming a two year replacement time for the fully insured Orion 3 satellite, based on our model, is between $0.50 and $0.75. However, we expect the psychological reaction to be greater. *** This could possibly create a similar buying opportunity to that created by the Globalstar failure of last Fall, as the stock is likely to overreact. _________________________________________________________________ Loral MARKET CAPITALIZATION $6,424 (MM) EARNINGS Q1 Q2 Q3 Q4 Mar Jun Sep Dec Year P/E Current 1998 NA NA NA NA $(0.68)A NM Current 1999 NA NA NA NA $(1.01)E NM Current 2000 NA NA NA NA $(0.96)E NM _________________________________________________________________ The Orion 3 satellite was placed into the wrong transfer orbit yesterday by the Boeing Delta 3 rocket. We believe that it is likely that the satellite will not be salvaged based on its current orbit. The satellite can only attempt to use its on- board propulsion system to finish the orbit transfer maneuver and reach geosynchronous orbit. The satellite is in a very low elliptical orbit and is first being raised to an altitude where it can deploy and use the solar arrays for power before the on- board batteries are drained. Boeing and Hughes management have not announced any conclusions about the possible recovery of the satellite. Loral is fully insured for the cost of replacing the satellite and launch vehicle. The worst case scenario is that the satellite is unusable and is replaced in two years. Eight Ku-band transponders on Orion 3 are under contract to be sold to DACOM for $89 million, of which over $31 million has been received to date. DACOM planned to use the transponders to provide DTH service to Korea. Based on our model Orion contributed approximately $1 per share in equity value ($4 gross asset value less $3 in debt) to Loral. To evaluate the worst case scenario of a total loss of the Orion 3 satellite, we imposed a delay of two years for start of service for the Orion 3 satellite and eliminated the DACOM sale to reflect the launch failure. This reduces our target price of Loral to $24 per share at YE99. However, we expect the stock to sell off in reaction to the event this morning. We would be aggressive buyers of the stock on any real weakness, just as we were after the Globalstar launch failure in September 1998. Over-reaction to that launch failure proved to be a great buying opportunity after the stock opened down nearly eight points at about $10 per share; Globalstar last closed at $21 3/8 per share. We don't expect the reaction today to be as severe as the Globalstar failure of last Fall. The last Delta 3 attempt (in August 1998) carrying PanAmSat's Galaxy X satellite failed on its maiden mission. Yesterday's Orion 3 launch was the fifth attempt in a month to launch the Orion 3 satellite. All four previous Orion 3 launch attempts were scrubbed, mostly due to technical problems. We have expressed concern with Loral's choice of being the first to launch on the Delta 3 following its failed maiden launch, as well as their scheduled launch of the Telsar 7 satellite on the maiden flight of the new Lockheed Martin Atlas 3A launch vehicle in June 1999. Orion 3 would be the company's first satellite to serve the Asia- Pacific region. Orion 3 is intended to provide services to business users in all major Asia-Pacific markets, including Korea, China, India, Japan, Australia, Southeast Asia, Oceania, and Hawaii. Orion 3 consists of 10 C-band transponders for broad distribution services, such as television programming, and 33 Ku- band transponders primarily for private business network applications and direct-to-home video services. Companies Mentioned: Loral, Orion, Hughes, Boeing, Lockheed Martin, Globalstar