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Technology Stocks
EarthLink Network ELNK Wraps Your Fish

An SI Board Since January 1997

Posts	SubjectMarks	Bans
11	0	0

Emcee: John Grandy	Type: Unmoderated

Introduction Compact

EarthLink Network ELNK just went public this morning. It was priced at $13, below
the filing range of $14-16 and as I type this the few idiot institutions who bought the
primary are dumping this loser on the hapless private investor at NO PROFIT. That's
right they're dumping this one at $13.

EarthLink Network is a nationwide Internet Service Provider (ISP) (without its own
infrastructure - they lease, primarily from UUNet) planning an IPO in the near future.

They cancelled their IPO once due to lack of interest and sponsorship but now that tech
stocks are on the rise they are attempting it again.

Stay Away! First off, check

techweb.com

[after Tuesday, Jan 21, you'll have to go to his column archives]

in which Tom Taulli, the creator of WebIPO and an expert on the tech IPO market,
warns off potential investors because in his opinion EarthLink will never make any
money, only losses.

What Taulli doesn't mention (possibly for fear of lawsuit) but which I will mention here is
that EarthLink is virtually controlled by The Church Of Scientology. That's right - the
same pyramid scheme masquerading as a religion which was exposed and debunked by
60 Minutes a few years ago.

EarthLink's CEO is 24 years old and was educated by his parents completely outside of
the educational system in Oregon. His financial backers are present or former members
of The Church Of Scientology, some of them high up in the pyramid scam.

I have now heard from a number of sources that pressure is placed on ALL employees
to convert to Scientology. This is no way to run a business, especially one in the
enormously competitive area of Internet Service Providers.

EarthLink's business model is worse than AOL's. Not only do they make all sorts of
unrealistic assumptions about future revenue flows, and costs of acquiring subscribers --
they also (unlike AOL) don't even own their own backbone.

If UUNet and the other big backbone providers continue to find business demand for
quality service skyrocketing to the point where provision exclusively to businesses is
much more profitable than re-selling bandwidth to retail providers, they will undoubtedly
cater to the most profitable audience and leave EarthLink high and dry.

How will EarthLink provide service at a profit ? They will be forced to either 1) build
their own infrastructure; something they have no experience in and which is extremely
expensive and complex; or 2) begin buying backbone through some sort of takeoever.

Then their business model will essentially be the same as the Baby Bells, AOL, MSN,
ATT, MCI, etc.

But by that time you can be sure that the big telcos will have got their act together and
competition in the non-niche retail area will be devastating and unprofitable for all except
those with the largest economies of scale - economies of scale only attainable via
substantial ownership of infrastructure, network expertise, and bundled marketing
(bundle inet service w/ phone, or with video-on-demand, etc.)

Any way you view the future of the internet as unfolding EarthLink is a sure loser.
Top-tier technology i-banks won't even touch them and they are relying on a trio of
2nd-tier wannabees. Don't get suckered by another Internet IPO snow job - stay away.

If you want to make some money, wait until the restriction on shorting expires and then
join me and short the hell out of this piece of moldy fish wrapping paper. Short ELNK is
a sure winner.

Go to reply# or date (mm/dd/yy):

Reply	Message Preview	From	Recs	Posted
11		John Grandy	-	1/29/1997
10	You were right on the nose there! I believe this stock went up to 21 for no app	asb	-	1/29/1997
9	Yes someone did, quite a drop after the recent runup. Oh, and of course my p	Curtis Gruber	-	1/28/1997
8	Quite a drop today. Someone bailed. Oh, and your post is verbatim Herb Greenb	John Klein	-	1/28/1997
7	Fred, The best I can give you right now on the connection between EarthLink Ne	John Grandy	-	1/26/1997
6	Various private sources. Some of them past or current employees of ISPs which	John Grandy	-	1/26/1997
5	John, Where do you get your information that Earthlink is controlled by the Ch	Fred Storck	-	1/26/1997
4	Yah, Curtis, I knew about Soros, but let's look a little closer: only 2 mi	John Grandy	-	1/26/1997
3	>>>> Normally the initial public offering of a company like	Curtis Gruber	-	1/25/1997
2	John, Stock is clearly being manipulated. Institutions dumping at no profit Wed	John Grandy	-	1/24/1997
1	This company has always been one of the more amusing stories in the IP world, a	John Klein	-	1/24/1997

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