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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: John Biddle who wrote (2560)10/11/1999 2:31:00 PM
From: PaperChase   of 15615
 
I think a lot of investors are looking at the historical operating income of the Racal unit and assuming this can only get better going forward. While the future is not written in stone, one of the reasons RACAL dumped the unit was the high marketing costs for the unit to compete. Although GBLX brings strategic complimentary assets to the purchase that RACAL does not have, GBLX will still incur the increasing marketing costs to compete in this market.

In a commodity market where the product price is falling and marketing expenditures are increasing just to "run in place", the strategic acquisitor must play hardball and temper one's bids.
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