On Wed, 14 Mar 2007 11:55:31 -0500, Brad Belton wrote > Correct and that I believe is what Matt's point is. Too early to > kick CLWR to the curb for at least two reasons: > > (1) short term market downturn > (2) additional 4M shares issued > > Both of these items can and often will soften a stock value. > > All that said I think $20 - $24 a share is ridiculous for CLWR. I expect > CLWR will bump back up maybe even beyond the IPO price once the > market bounces back. The smart money will jump ship saving their > skin and the stock will turn downward from that point on. > > "Clearwire has lost more than $460 million during its four-year existence. > The company generates about $100 million in annual sales..."
Ok, Clearwire expects to continue to build out. They expect to spend 1.1 billion, and market hacks expect them to triple the customer base over the next year or so. So, even next year, they're going to spend between 3 and 4 times their gross revenue. AND, they have 664 million debt, too. If they stopped building out and concentrated on sales, I don't know, and nobody seems to know, how much the'll be spending. In other words, nobody seems to know how much of this spending is fixed cost and how much is expansion. Their own claim, is that expenses are near 300 million annual. However, they're apparently not concentrating on market growth, as annual sales only went from 67 to 100 million for all of '06. I read elsewhere that almost all of that growth is due to equipment sales, not customer sales. Then the next article contradicts that. http://biz.yahoo.com/seekingalpha/070308/29050_id.html?.v=2 http://www.fool.com/investing/value/2007/03/12/clearwire-burns-cash-churns- investors.aspx?source=eptyholnk303100&logvisit=y&npu=y http://www.marketwatch.com/news/story/clearwire-shares-pummeled-path- profit/story.aspx?guid=%7BBFAAD8AC%2D3B2E%2D48D4%2DA100%2DDCEC9ACDCAE4% 7D&siteid=yhoo&dist=yhoo > > Certainly McCaw can afford this type of bleeding, but for how long > and more importantly how long will Wall Street wait to see the light > at the end of the tunnel? Will CLWR ever bask in the sunshine? > > Long term I only see a decline in value unless they start producing profits > real quick! CLWR isn't making any money and doesn't have a bright > future of EVER making any money. Hope I'm wrong because a CLWR > failure is a failure for fixed wireless as a whole. Actually, it appears they could make money. But the question is, will they stay for ever in the "build out" mode and spend themselves totally out of money, without marketing to and finding enough customers to pay the bills? I had a potential investor, who was the opposite mind of the CLWR management, who insisted that I not expand to any of my yet not deployed but originally planned sites until I had completely maxed out capacity on everything now in place. Oddly enough, the more sites I have in strategic locations, the greater success I have at potential customer's sites. Then again, I'm not just putting up every location I can find. I figure I can't expect to get more than 3% market penetration in the areas where DSL and/or cable exist, and probably less, and not more than 30% where I'm the lone provider. With a target size of 600-1100 customers in the next 3 years, this means I have to either target 4000 residences with nothing else available, or 40,000 where there's competition. There's more than 4000 homes in the area I'm willing to expand to. The trick is that many of them are isolated areas of a 1, 5, 30 square miles, and we have to continue to do inexpensive expansions to hit those areas. I have a good 1/2 of those covered now, and we're going to add the next 1/4 this spring. If I have 1000 customers, I'll have about $40K a month rolling in, with fixed expenses (not including wages and labor) of about 10%. So, does Clearwire's model sound better than mine, when it comes to likelyhood of survival? -------------------------------------------- Mark Koskenmaki <> Neofast, Inc Broadband for the Walla Walla Valley and Blue Mountains 541-969-8200 -- WISPA Wireless List: [email protected] Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
