The Winstar Story

Asensio & Company, Inc. published its first strong sell recommendation on Winstar on March 8, 2001, nine days after Winstar announced its fourth quarter results. Winstar’s analysts published nine reports rebuffing the facts and analysis contained in our report, and firmly reiterated each of the buy recommendations. Winstar’s analysts dismissed our report as uninformed comments by a short-seller in support of its proprietary trading positions. They also stated that they were CLEC and Winstar experts and that Asensio & Company had no known CLEC experience and did not follow Winstar. We had been following Winstar’s progress from an obscure penny stock promote to an absurd Wall Street perma-bull darling for 3 years. In fact, we were quoted in Fortune dated February 15, 1999 stating that Winstar’s network was inferior, management was too promotional. We were also quoted in eCompany Now dated December 2000 stating that the event we were waiting for was bankruptcy. On April 16, 2001, Winstar announced that it did not make aggregate interest payments of approximately $75 million on its senior debt securities and that it was considering reorganization under Chapter 11. On April 17, 2001 Winstar’s stock traded at a low of $0.12, 99% below its high just 49 days ago, giving its equity a $11.1 million market capitalization.