Amerifirst Securities Announces Investment Opinion on Metricom, Inc.

Business Editors

NOTE TO EDITORS: The following is an investment opinion issued

Amerifirst Securities

DALLAS--(BUSINESS WIRE)--Nov. 30, 2000

Amerifirst Securities Reiterates Metricom, Inc. (MCOM) as a

Strong Buy With a 9 Month Price Target of $60

Metricom/Ricochet is the Surfboard that Puts You on Top

of the Wireless Digital Wave...with Ricochet You're

Picking Up Good Vibrations....

The short interest in Metricom (Nasdaq:MCOM) in the last 90 days has increased from 400,000 shares to approximately 5,000,000. Metricom has 31 million outstanding shares. The short interest represents almost 17% of the total outstanding shares. The short interest has exploded for three succinct and definite reasons.

1. The Federal Reserves tight money supply, the so-called

softlanding, has become a crash landing. The fear and panic

from this tight money policy created a mass exodus out of the

tech sector.

2. An analyst at a major wirehouse made reference to an

unresolved financing issue at a telecommunications conference

stating that Metricom needed an additional 500 million dollars

to build out its 46 city footprint and put them into a

demographic envelope of a 100 million populace. This was not

new news. However, the untimeliness of this announcement

coincided with a major contraction in the overall NASDAQ

sector, and news that Globalstar could not raise additional

funds and was in dire need of cash. So Metricom got misgrouped

with companies needing cash with little hope to raise it. This

further created the misperception that Metricom was

potentially an Iridium, a cash burn cow. This is categorically

untrue. Metricom never was and never will be an Iridium.

Iridium's business model was flawed from inception. It was to

coin a phrase, a very bad science project...dead on arrival.

Metricom on the other hand sits with 811 million plus dollars

in cash in the bank as of today. More importantly, Iridium was

a satellite/phone connection that sold metered usage at 10 -

20 dollars per minute. There are probably 10 potential users

for this service in the world. Metricom, on the other hand, is

offering a data network service with a model that is feasible,

realistic, and affordable. The Ricochet service will cost the

consumer a flat rate fee of $79 - $99 dollars a month on an

all you can use basis. Now, the modem may be bought at most

resellers for $99. The public can and will pay for this

service.

The internet is a digital library, not just a new way to

sell jellybeans, and the public needs more information daily

because more and more businesses require you to access them on

the net. This creates more need for a purveyor of data like

Metricom. Metricom is at a flexpoint then between the digital

data and the consumer. Metricom is the railroad that hauls the

freight...the data. This is most likely the first inning of

Internet evolution and sophistication. At the moment the

internet is clumsy and frustrating. But new software is

written daily to enhance the consumer's experience on the net.

So the wave broadens. More and more careers will depend on

this information, particularly as society mobilizes. In a

rapidly changing world access to the internet will be a

necessity not a luxury, and the mobile knowledge worker will

not be able to compete without his wireless internet

connection. Ricochet is in the sweet spot of this wave and

will be swept up in the current once the pieces to this jigsaw

puzzle are assembled. This is not a probability but something

of a certainty. Metricom will be the preferred utility...the

interstate...for this heavy data traffic. The flat rate

connectivity makes Metricom something of a Walmart of the

data-networking world, a home for value, a difference between

the cost of Iridium and Ricochets' service. And, Metricom

needs to be teed up in all 46 markets for this model to work

in the most, optimized way. Then Metricom functions more like

an AOL...an everywhere, everyman, affordable, agnostic, more

democratic model...tried and true.

The flat rate monthly service Metricom offers works and is

affordable because the 900 megahertz spectrum is free and

reusable. The reusable aspect of this spectrum precludes

overload and system failure. This is the value of the patented

technology...leveraging off the unlicensed spectrum. More

importantly, Metricom is not launching satellites, but hanging

transceivers from lamposts, slightly more low tech and low

maintenance.

3. Metricom's stock has been under siege by aggressive short

selling. Fidelity Investments sold their tech holdings, which

created an opportunity for short sellers to piggyback the

Fidelity exit from their NASDAQ positions. Metricom was

identified as a short sell, because of intense capital

expenditures that to the short seller and his black box look

like losses. The difference here is that Metricom is building

a network. These so-called losses are more accurately

described as investments...not Superbowl commercials. The

transceivers, and waps, are real property investments and a

one time expense. Metricom has budgeted for marketing but

relative to the dollars necessary to build the network these

cost are negligible. The short sellers' bet here is that in

the current market conditions Metricom cannot access the debt

equity markets to raise the additional 500 million dollars

needed to build out the balance of the 46 city deployment. So,

when metricom announced any and all good news...ie: the

channel partnership with Aether Systems, Metricom never

participated in market rallies. This was a function of short

sellers constantly leaning on the stock. Ultimately, value is

determined by supply and demand...Metricom never rallied

because the short sellers flooded the market with their supply

and in the environment that we have been in this caused

Metricom's stock price to drift lower and lower due to a sell

imbalance in the stock. This is legal, and a means for the

short seller to profit, but this phenomenon really masks the

true value of Metricom's network and further creates a false

picture of Metricom's true value. Ultimately, markets are

efficient and this becomes forgotten noise. But, the true

value of Metricom is temporarily skewed by an orchestrated 

selling off of stock.

In March of 1999, in a robust NASDAQ market, Metricom's stock traded as high as $109. This unfortunately was also not representative of true value. Metricom was at the time a concept stock trading on emotional outbursts. At the time of this 52-week high Metricom had not launched Ricochet in any one city in its footprint. Because Metricom does now operate in 11 cities, at no time has Metricom been more legitimately valued than it is today. The right-of-ways, the transceivers, and the waps necessary to operate the Ricochet network, plus the two network operating centers reflect intense capital expenditures in place today. Metricom's stock closed at $6.50 as of yesterday. Metricom will be lighting up Chicago and Los Angeles in December. Equally as important, Metricom has wrapped up all the outstanding right of way issues that were unresolved in New York. The system now has been battle tested and debugged in the present eleven markets. This represents countless man-hours, capital expenditures and intellectual property...more value.

The Ricochet user is a satisfied consumer, Metricom has not overpromised and underdelivered. This is key. The service works and Metricom for the most part is sold by word of mouth. This is a powerful testimonial to the reliability of the system. The typical Ricochet user is an ambassador for Metricom's service. This represents more real value earned by a product that works and creates efficiencies for its user. Metricom's ace-in-the-hole is the service itself...it works, it delivers the speeds it has promised, it's affordable, and it's reliable.

The financing issue is the bogie man in the short seller's mind. However, Metricom's present owners are not financial lightweights. Metricom is 49% owned by Paul Allen, cofounder of Microsoft, and 39% owned by Worldcom. Both Mr. Allen and Worldcom recognize the futuristic values of a workable wireless optimized data network. Worldcom bought into Metricom because they did not want this technology to fall into the hands of its competitors. Because the NASDAQ sector has severely corrected, does not mean that Metricom's future value cannot be realized. It would be terribly short sighted and myopic for the public to misperceive that Metricom's value has been radically and irretrievably affected by the fear and bloodletting in the NASDAQ sector today. Tomorrow will be better, and so will the price of Metricom's stock. There are major entities sitting on vast sums of cash ready to invest in an enterprise...with the future scope and promise of a national wireless data network. Because Metricom cannot access the debt equity markets today, does not preclude it from getting this money from multiple sources in a private transaction. Astute investors understand that the key to creating wealth is to buy when fear rules. The fact that Metricom's stock is so depressed today actually benefits a private deal and creates opportunity for a Microsoft type of investment. A private deal today could be done at, or below, P. Allen's and Worldcoms's conversion price of their bonds. Future growth for companies like Compaq, Dell, and National Semiconductor will come from wireless growth. Finally, the future price of Metricom's stock will be driven by all the new R2 enabled devices so visible at Comdex. The Novatel Merlin PC Card was achieving data rate speeds on the Ricochet network north of 400 kbps. The National Semiconductor webpad...the Metro...weighs 2.2lbs., 1/5 the weight of a traditional laptop. These appliances will make Ricochet ubiquitous. After the first quarter of next year we see the Fed cutting interest rates and the NASDAQ seriously coming back into favor. Therefore, Amerifirst Securities reiterates its strong buy on MCOM with a 9 month price target of $60.