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Technology Stocks : Log On America, Inc. LOAX -- Ignore unavailable to you. Want to Upgrade?

To: harryl1 who wrote (156)	6/1/1999 2:39:00 PM
From: ISP_Investor	Read Replies (1) \| Respond to of 353

I have been short Log on America for a while and added a little more every now and then. This is one I went out on a limb on an told a relative to short, but I did a lot of homework before I did that. My own "back of the envelope" valuation for LOAX is less than $5 per share based on LOAX trading on a multiple of annualized monthly recurring revenue and adding the cash raised from the IPO back into the pot. I've been watching their hires fairly closely and the fact that they have hired a PR firm and a marketing person tells me they are focusing on the wrong things in terms of hires. The fact they had to "borrow" Nortel employees to help with the equipment installation tells me they are going to have a beast of a time deploying and managing their network. Running a facilities-based telecom company and operating an internet service provider are very different animals. An ISP is a few servers and a technical guy to manage the internet connections and take customer calls when they have problems. A CLEC is a MONSTER compared to an ISP in terms of operations. You have to worry about billing, provisioning services, working with the incumbents carriers to resolve issues (incumbents will do anything to dog CLECs), customer service (small businesses depend on the internet as much as electricity), and managing a telecom network (deploy, manage, upgrade etc.) The CEO is a sales guy and their isn't a COO so implementation of their plan is a long shot at best. They don't have billing expertise, telecom expertise, customer service expertise, or network management expertise. THERE HAVE BEEN ZERO ANALYST REPORTS ON THIS STOCK AND THUS IT WILL HAVE ZERO INSTITUTIONAL SUPPORT EQUALLING LOW VOLUME, HIGHER SPREADS, AND LESS OVERALL MARKET SUPPORT WHEN THE LOCK UP AGREEMENT EXPIRES AND MANAGEMENT CAN DUMP THEIR STOCK. DON'T BE LONG IF THE UNDERWRITER LETS THE EXISTING INVESTORS START SELLING. GOOD LUCK!