MFNX: Black Fiber Venture. Is it for real or is it just hype?
From the 6/30/98 10Q:
The Company currently operates a fiber optic network in metropolitan New York. The Company is currently expanding its New York / New Jersey Network (the "NYNetwork") to increase its coverage within the New York/New Jersey/Connecticutmetropolitan area, as well as constructing a fiber optic route between New YorkCity and Washington, D.C. The Company also is constructing intra-city fiberoptic networks in Washington, D.C., Chicago, and Philadelphia. This expansionwill bring the Company's total infrastructure in these four key Tier 1telecommunications markets to in excess of 380,000 fiber miles and 1,000 routemiles.In addition, the Company also recently announced its plans for a major expansioninto Boston, the San Francisco Bay area and Silicon Valley. The Company believesthat the San Francisco Bay area / Silicon Valley and the Boston expansions willcover an additional 150 and 75 route miles, respectively, and that both will becompleted within 24 months, although there can be no assurance that the projectswill be completed in this period. The Company is currently engaged in theplanning process for construction of this expansion and is also assessing theamount and nature of additional financing that may be required to implementthese expansion plans.In addition to the Company's New York to Washington, D.C. inter-city network,the Company is establishing inter-city links connecting New York to Chicago,Chicago to the West Coast and New York to Boston. The Company entered into a joint venture agreement with RacalTelecommunications, Inc. ("Racal") on November 26, 1997. The joint venture,named International Optical Network LLC ("ION") will enable the Company and Racal to provide transatlantic communication services, between New York and London, to their respective customers.
Can some one verify the status of the west coast/east coast corridor projects? These are very capital intensive ventures that still seem to be in the "paper stage". No wonder their balance sheet still looks clean. The heavy capital investment cycle has not started yet.
The Company reported a small profit and positive cash flows from operations in the most recent quarter. However, they do seem to exercise significant flexibility in revenue recognition. In addition, some cash flows assigned to operating activities seem to belong to financing activities as the contracts/pre-payments they are getting seem to be part of leasing arrangements.
Market cap/ratios look very interesting. Stock was recently entered as pick in October short contest:
quote.bloomberg.com
Just a few thoughts to chew on.
Pancho Villa
PS: nice price action today. Looks like a few big boys have bought the story.... The Putman rocket scientists are back in the game. Let's see who wins this one.... |
