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Technology Stocks : GX Investors Thread
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To: CF Rebel who wrote (117)8/23/2001 11:00:37 PM
From: Theophile   of 586
 
CF, I agree with that. There were other considerations. I appreciate your voicing my own recommendations.
Martin

I have not seen this posted here:

use the link, or the condensed version below.
"http://www.zdnet.com/intweek/stories/news/0,4164,2807244,00.html

There has been much ballyhoo lately regarding the purchase of fiber capacity through admittedly "creative" methods. Now comes news this morning that Level 3 has repurchased capacity formally sold (for $94M) on Yellow (one of the most advanced fiber segments on the planet) to a company by the name of Viatel. Level 3 just bought it back for $100,000 plus the forgiveness of $9M in debt Viatel owed Level 3. In other words Level 3 picked up an additional platform on which to expand revenue streams down the road for 9.68 cents on the dollar. Let’s not forget about the numerous revenue-producing customers that were acquired along with getting the fiber back.

This is the first fairly transparent example of one of these deals.

We also know that Global Crossing and Qwest have both been participating in similar acquisitions. The analyst community has been having a field day with writing these up as "swaps" or some other derogatory term that implies no real gain by those involved other than being able to book “questionable” revenues. Worse, some of the reports have implied that it is an indication of desperate companies.

In a backdrop where the masses believe in the “bandwidth glut” thesis no one wants to hear about companies acquiring assets to expand their business . . . much less that they have done it at a fraction of the cost to installing it. In fact, they point to these sorts of deals as proof that the values of the assets should be revalued down. ...
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