Paul, more opinion:
I think we'll see 41 when a couple things happen. First, ICIX mgmt
has to wrap up the deal for DIGX, and at a great price. Great in this regards has to be
north of $120, which will put another $500 - $600 mm in ICIX's cash pots, post tax.
Second, they have to tie down the potential conversions outstanding from all the
preferred's and warrants. If they can guide the analysts and tell the story that the
additional 24 mm shares hanging over the market's head WON'T be coming at this time,
it solves a large issue. Finally, (and this is out of control of ICIX to some extent), the
CLEC/DLEC/ILEC/wholesale bandwidth sector has to come back into the good graces
of investors. Look at the charts of WCG, BRW, and some of the other smaller telephony
players and you can see they're all pretty punky right now.
If ICIX plans now, they could orchestrate a very nice PR campaign to give investors and
analysts alike a solid preview of what ICIX will look like post DIGX. This guidance should
include: A preview of the spotless balance sheet, shares outstanding, conversion
features of everything out there, an EBITDA and EPS earnings preview, strategic focus,
competitive advantage and 5 year outlook. Morgan Stanley has shown a very strong
willingness to listen to the company. Bear Stearns has a compelling reason to listen and
spread the gospel as well.
When you see those things come together, you may see the company trade at a multiple
of revenue for its CLEC operation at 2.5 to 3 times, much closer to that of BRW. If we still
have only 53 mm shares out, that's easily in the $41 to $50 range...
That's the long winded answer to when we'll hit $41...ICIX Mgmt, you've got your work cut
out for you!
Dan'o |
