Winstar Communications
| Company type | Public |
|---|---|
| Industry | Telecommunications |
| Founded | 1993 |
| Founder | William J. Rouhana |
| Defunct | 2001 |
| Headquarters | United States |
Area served | United States, Europe, Asia, Latin America |
Key people | William J. Rouhana (founder) |
| Products | Broadband services for business clients |
| Revenue | $445.6 million (1999) |
Winstar Communications, Inc.—also referred to as WinStar Communications—was a U.S.-based telecommunications provider specializing in broadband services tailored for business clients. Its extensive broadband infrastructure spanned 60 key U.S. metropolitan areas, encompassing all of the top 30 markets, as well as ten international locations across Europe, Asia, and Latin America.
As a notable participant in the late 1990s internet and telecom booms, Winstar achieved a market valuation surpassing $4.4 billion by the year 2000. For the fiscal year ending December 31, 1999, the company reported revenues amounting to $445.6 million.
In 1995, Winstar expanded its portfolio by acquiring Fox Lorber Home Video from New Video; following Winstar’s collapse, the Fox Lorber assets were subsequently acquired by Genius Products in 2001.
History
Established in 1993 by William J. Rouhana initially as a reseller of long-distance telephone services, Winstar evolved into a Competitive Local Exchange Carrier after securing radio spectrum licenses and launching wireless broadband offerings.
The company went public in 1994, debuting on the Nasdaq stock exchange under the ticker "WCII". During the mid-1990s, Winstar broadened its business through the acquisition of Fox Lorber Home Video.
From 1996 through 2000, Winstar’s share price experienced an increase exceeding 600%, while annual revenue escalated from $2.7 million in 1995 to over $445 million by 1999. This growth was supported by favorable analyst evaluations, including endorsements from Jack Grubman, which enhanced investor sentiment.
Bankruptcy
Despite its swift expansion, Winstar was unable to generate adequate revenue to service debts incurred from substantial capital expenditures necessary for network development. Its creditors comprised financial institutions, high yield bond holders, and prominent telecommunications suppliers such as Lucent, which extended considerable vendor financing.
In April 2001, facing financial distress and after reducing its workforce by nearly fifty percent, Winstar sought protection under Chapter 11 bankruptcy. This reorganization effort was ultimately converted into Chapter 7 liquidation on January 24, 2002.
A decade later, in 2011, Oak Point Partners—a private investment company—acquired the residual assets from Winstar’s bankruptcy estate, including any assets that had not been previously administered.