ACNS: American Communications Services Message Board

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Technology Stocks : ACNS: American Communications Services

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To: wendell morris who wrote (60)	11/28/1997 12:00:00 PM
From: Mahesh	Read Replies (2) of 102

Wendell, I agree. when I loked at their balance sheet and cash burn rate, it was a sorry picture.The stock ran up primarily due to the following reasons, I believe. 1. General runup in CLECs. 2. Perception that the company was an acquisition target. 3. Perception that the infrastructure was gold. 4. Relatively great seqential increase in quarterly revenues. Why would anyone consider ACNS as an acquisition when there are so many other CLECs that are doing a lot better? This infrastructure is being put into the ground at a rapid rate and by many many players such as LECs, Utilities and CLECs. the infrastructure's vlaue is not increasing but diminishing. The CLECs will capture some business, but it won't be enough to sustain them. Look at the ACNS revenues, so they jumped from almost nothing to 10M+, but they need probably 70 to 80M looking at their cash burn rate. They had difficulty placing bonds, till they offered 13.755 plus kept some five payments in escrow. This company will get bought out from bankruptcy at bargain prices. Stock investors will probably get nothing and bond investors probably pennies on the dollar.

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