| When it all comes out in the wash, it will be interesting to see what transpired in the EXDS boardroom during the past month or so, and specifically the position taken by Casey. Ellen Hancock had said over and over and over again that EXDS would make it to cash flow positivity without any doubt whatsoever, that customer erosion was overstated, that reliance on dot coms for revenue was overstated, that managed services were working out nicely and constituted (I believe) 2/3 of revenue, etc.. A majority of the board got cold feet and did not agree with her desire to stick it out. Those who agreed with her might have been the three venture capitalist directors who recently resigned. I think Casey, as an EXDS director, was between a rock and a hard place. I can't believe that he wouldn't have wanted Hancock (and EXDS) to stick it out. That he didn't resign doesn't mean he agreed with the timorous board majority since resignation would have meant foregoing any say in things, not a prudent course for the largest EXDS shareholder. Things I read today suggested that EXDS has been exploring alternatives with investment bankers for weeks, that potential acquirers did not relish assuming the $3BB EXDS debt and that Hancock was perceived to be a roadblock to "reorganization." If that speculation is correct, then it would stand to reason the next step might be getting rid of the debt in bankruptcy by giving the creditors a very large percentage of the equity, particularly in light of the rock bottom appraisal value of EXDS' facilities given the super-glut and 40-60% vacancy rates in "dot com hotels" frequently discussed in the business press. No doubt there are also preferred shareholders in front of GX. It appears then that there may be little if anything left for GX other than the carriage contract. This was discussed quite a ways back on the other thread, but it is my understanding that the trustee in bankruptcy has the power to accept or reject an executory (to be performed in the future) contract such as the carriage agreement. In that it is a best-market-rate arrangement that Hancock at the time of closing was quite delighted with, there is no reason to assume that the trustee would not accept the GX (and AX) carriage contracts as well as the corollary joint marketing agreements between EXDS and GX (and AX). I could be wrong, but my distant recollection is that this was only a $40MM/yr contract. (Ah, visions of the DoD contract dollar minimization.) In any case, in the four-legs-good two-legs-bad mindless mindset of this market with respect to this sector, GX IR/PR might want to get out there and say something to hopefully minimize what will no doubt be a sound tar-and-feathering. I can't imagine Casey being real happy with the EXDS board majority that canned Ellen Hancock possibly to clear the way for bankruptcy. |
