Winstar Communications

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Winstar Communications
Defunct
Industry Telecommunications
Fate Liquidation via Chapter 7 Bankruptcy
Founded 1993
Defunct 2001
Headquarters New York, New York
Revenue $445.6 million (1999)
Number of employees
3,900 (1999)

Winstar Communications (at some point WinStar Communications)[1] was an American telecommunications company that provided broadband services to business customers. Winstar owned and operated a broadband network in 60 major markets in the United States, including each of the top 30 U.S. markets and ten markets internationally in Europe, Asia, and Latin America.

Winstar was a notable example of the internet and telecom bubbles of the late 1990s. At its peak in 2000, less than a year before its collapse, the company had a market capitalization in excess of $4.4 billion and revenues of $445.6 million for the year ended December 31, 1999.[2]

Winstar also bought Fox Lorber Home Video from New Video in the mid-1990s. In 2001, Genius Products bought out Fox Lorber after Winstar was shuttered.

History[edit]

The company was founded in 1993 as a reseller of long distance service. After winning auctions for radio spectrum, the firm became a Competitive Local Exchange Carrier and began selling wireless broadband service.[3]

In 1994, Winstar completed an initial public offering, listing its stock on Nasdaq under the symbol "WCII". In the mid-1990s, Winstar acquired Fox Lorber Home Video.

Winstar stock soared by over 600% between 1996 and 2000[4] as revenue grew from $2.7 million in 1995 to over $445 million in 1999. The company also received positive research reports from analysts, such as Jack Grubman,[5][6] contributing to the Global settlement.

Bankruptcy[edit]

Despite its growth, Winstar was unable to generate enough sales to cover debts from massive capital expenditures required to build out its infrastructure. Among its creditors were a number of banks and high yield bond investors as well as other large telecommunications players, including Lucent that had offered the company significant vendor financing.[7]

Winstar filed for Chapter 11 bankruptcy protection in April 2001.[8][9] The Chapter 11 (reorganization) cases were converted into Chapter 7 (liquidation) cases on January 24, 2002.[10]

References[edit]

  1. ^ Fox Lorber Home Video's official ident reports "WinStar". Unclear where "Winstar" comes from.
  2. ^ Winstar Communications - SEC Form 10-K for Year Ended December 31, 1999
  3. ^ Fixed Wireless Systems Gaining Credibility as Phone, Web Links. LA Times
  4. ^ Assessing a Big Fish In a Fast-Growing Pond. New York Times, June 13, 1999
  5. ^ The Real Telecom Scandal, Wall Street Journal, September 30, 2002
  6. ^ [1]
  7. ^ Business Case SSRN
  8. ^ Winstar Files for Bankruptcy, Blames Lucent. Reuters, April 19, 2001
  9. ^ Lucent Fined $25 Million By S.E.C. In Fraud Case. New York Times, May 18, 2004
  10. ^ Winstar Communications: Chapter 7 Bankruptcy Motion. December 4, 2007