Metricom Rides the Wave for Anything Wireless

Was it wrong to bash Metricom two months ago? Perhaps, but we'll see who has the last laugh.
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LONDON -- Investors in

Metricom

(MCOM)

are having the latest laugh, but it's way too soon to say if theirs will be the last.

Shares of Metricom traded for 47 and change about two months ago, when a snide

column in this space suggested that the Silicon Valley company was crooning the same sorry tune it had been singing for years. Metricom, with support from investor Paul Allen and, more recently,

MCI WorldCom

(MCOM)

, had big plans for building a wireless Internet service for road warriors and other mobile professionals.

SiliconStreet: Join the discussion on

TSC

message boards.

But the company needs to spend about $2 billion to build its system in 46 cities by the end of next year. Never mind that the PC may not be the way Web users want to connect; a wireless system available on a subscription basis presumably has value beyond what's apparent today. The craze for anything wireless clearly is boosting Metricom's fortunes -- both real and perceived.

Indeed, one analyst, John Bensche of

Lehman Brothers

, saw the value of Metricom before any of his brethren. He published a price target of 76 on Metricom in the fall, calling the maker of Ricochet wireless modems an "undiscovered jewel."

Well, the jewel is being discovered. Shares of Metricom have been racing, closing Monday at 90 3/16 after briefly shooting past 100 in December. And the shares have been on the upswing even though Metricom has divulged plans for hundreds of millions of dollars in new debt and equity financings. That the company would return to the capital markets is no surprise -- it has publicly professed the need for that.

That it would strike while its stock is soaring shouldn't be surprising either. After all, this is an era when even the prospect of increased supply isn't enough to sink a momentum star.

Bet you'll never guess which investment bank is underwriting Metricom's complex offerings. To the bright students who ventured Lehman Brothers goes a gold star from Lashinsky's The-Way-it-Works School of Corporate Finance. The bank will be the "sole book-running manager," according to a Metricom press release, but will be assisted by co-managers

Salomon Smith Barney

,

Chase Securities

,

J.P. Morgan

and

Merrill Lynch

.

Sarcasm aside, this stock likely is moving up because professional investors are hearing a bullish story from company management. And one can rest assured that shortly after Metricom sells its follow-on stock offering of 5 million shares -- in addition to the $425 million it hopes to raise from issuing new debt -- that the four co-managing banks will initiate coverage of the company. (Lehman's Bensche, who rates Metricom a buy, didn't return phone calls requesting comment.)

As noted, that's the way it works.

The Dome

The British are famous for their collective stiff upper lip. But when it comes to London's new

Millenium Dome

, they show themselves instead to be whiners of the first degree. Like a good American tourist, I trooped out to the Dome on Sunday and found it to be a wonderful -- if strange -- place.

The Dome, open for less than two weeks, has become infamous for its $1.2 billion price tag, long lines and poor heating. It also looks weird: a big tent placed near the zero-longitude meridian in Greenwich with 12 yellow masts (one for each time zone) sticking up into the air at an angle. Inside are exhibits devoted to esoteric and futuristic topics, including "journeys" (sponsored by

Ford

(F) - Get Report

), "money" and the "body."

So for anyone considering visiting this widely labeled white elephant, the reality is much less bleak than the negative hype. It's easy to reach by the London Underground (which lets passengers off a few steps from the Dome's entrance), it's warm enough that you can leave the long underwear at home and the lines are no worse than at

Disney World

-- while the educational exhibits are a good deal more interesting.

More Random Musings from London

Is it global warming, or could there be another reason the weather has improved in London? When I lived here 12 years ago, I don't think I ever saw one day with the sky as blue as it's been for three consecutive days here. ... Speaking of white elephants, more than a decade ago, the

Canary Wharf

real estate development was just a boondoggle-in-the-making in the East End of London. Now the area is bustling, complete with a convenient subway connection, fancy restaurants and even a

Maserati

dealership in the lobby of one building. Ah, capitalism.

Adam Lashinsky's column appears Tuesdays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky writes a column for Fortune called the Wired Investor, and is a frequent commentator on public radio's Marketplace program. He welcomes your feedback at

alashinsky@thestreet.com.