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PSI's management will be vindicated. This Mr. Macleary is trying to steal the company. Bill Schrader's no dummy. PSI represents the perfect backbone for internet telephony and ultimately video (the mega bandwidth killer app)transmission. This company is easily worth 10 times rev's....and I stress REVENUES. You have to understand that the landscape will be completely different in 1 and especially in 2 years. It's Revenue (market share) that counts, not earnings at the moment. I'm frankly, shocked at the undervaluation of PSIX right now. I'm convinced though that over the next few months and year...the discount will go away. Even though the deal with IXC may seem a little like a spoiler, it's not such a bad thing. It's all in POSITIONING. The deal with IXC does two things: first, it allows them to leverage their revenue growth going forward in a way that would not be possible without the fiber coming from IXC, second, it buys them time in which to grow that revenue. I guess it does a third thing too, which may be unpopular, and that is it will serve as a "poison pill" keeping somebody like USi from stealing the company. Selling out at $15 now would be like calling the Superbowl after just the first quarter. Internet/communications applications will be consuming 100 times the bandwidth of today in 3 years, thus increasing the value of such high powered state of the art "real estate" by the time they have to come up with the 200 million to finalize the deal with IXC. By that time, 200 million will be cheap for the 10,000 miles. The smartest way to play this, in my opinion, is to buy IIXC as well as PSIX. I would venture to predict that the whole ball of wax is a PRIME takeover candidate. AT&T for example, has a new CEO who is aggressively addressing their slowness in engaging the market (now hugely emerging) for internet commerce. THIS IS A BATTLE FOR EYEBALLS.....and USERS/REVENUE = EYEBALLS = $$$$$$$$. IIXC will now be an even more attractive takeover candidate, as they have cut a HELL of a deal for PSIX...this also puts some urgency on such a takeover, since the PSIX stake will not stay cheap for long....Tek |
