BroadBand would like even a narrow margin.

• Author: Williams, Christopher C.
• Position: BroadBand Technologies Inc.

BroadBand Technologies Inc. (BBTK-NASDAQ) is stuck in the information superhighway's slow lane. Nine years ago, the Durham company became the first to unveil software and electronics that allowed telephone companies to deliver an array of services, including voice, data and video, without running fiber-optic cable into individual homes.'

But phone companies have been hesitant to embrace the technology. Several have stepped up to test BroadBand's system, but so far only Bell Atlantic has signed a commercial contract. As a result, the company keeps racking up losses, spending $30 million to $35 million a year on research and development.

Things got so bad that in March the board yanked the CEO job from founder Salim Bhatia, leaving him with the title of chairman and a vague job description. Then it ponied up a $4 million signing bonus to woo Dave Orr, a telecommunications veteran, as CEO.

"The story with this company is always 'next year,'" says David T. Parrish, an analyst with The Advest Group in Boston. He had expected BroadBand to break even by 1998's fourth quarter but now sees mid- to late 1999 as more likely. BroadBand has twice pushed back its projection of a profit. CFO Timothy Oakley now says it won't happen until the fourth quarter of 1998 or the first half of 1999.

"We've always said it was dependent on deployment of the system" by the regional Bell operating companies, he says. BroadBand's trouble is that its system is but one of many ways to funnel high-speed services into customers' homes. And for the most part, phone companies haven't yet rallied around a particular technology.

"This is a very high-risk equity," says Chandan Sarkar, an analyst with SoundView Financial Group in Stamford, Conn. "I'm telling folks it's still too early to jump into the stock." Investors are listening. The stock has fallen about 70% in the past year and hit a low of $6.63 in late April. At the end of May it was trading at $9.31, down from a three-year high of $37 in mid-May 1996, when investors were bidding up tech stocks. To show confidence in the stock, BroadBand announced in March that it would buy back 1.3 million shares.

Sarkar expects the price to rise later this year when BroadBand announces a contract potentially worth more than $100 million with Southwestern Bell and one with Samsung Electronics of Korea valued at about $400,000. The company has attracted attention from two big institutional investors. Goldman Sachs & Co. in New York took...