Zeev's Turnips Patch-No Politics (ZEEV)

[phill]

Zeev, re: NXTP fair mkt value, lotta factors, imho:

some that come to mind:

• both parties (FON/NXTL and NXTP) are captive of an agreement - I haven't seen anything specific on the terms

• NXTP book value looks to be only pennies, mostly because of $1.6B outstanding debt. But that book includes about $3.40 (after depr/ammor) of "equipment" Given the need to convert to cdma, I suspect the equipment book has become a bit overvalued, possibly leaving a net negative enterprise value. otoh, if MOT holds a lot of that debt (a possibility; I haven't got that far), it could probably be squeezed so as not to be left out in the cold (MOT, that is) by the new FON/NXTL

• current income about 0.50/share. revs and operating income show good growth, but lots of irregular expenses and huge debt service have led to lots of negative quarters (and consecutive negative years) on the bottom line

• 52 wk low stock price is about $11; 52 wk high (prior to merger run) was about $18.50

• FON is notoriously, chronically short of cash and loses money every quarter (they make it up on the volume?) - the NXTL deal is reputed to be stock/cash, thus I suspect FON/NXTL will want to buy out NXTP for as much stock and as little cash as possible.

My suspicion is the market already has got it right. That is, after the big bump on the merger announcement, a slow slide back to reality ($14-$18?) as all this info starts to sink in. But, I've been very wrong on these things before. Would appreciate your thoughts.

regards,

phill