PSIX up 26.5%, Takeover(?) Message Board

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Technology Stocks : PSIX up 26.5%, Takeover(?)

PSIX 62.95

-4.3%

Dec 12 9:30 AM EST

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To: James Young who wrote (942)	4/23/1997 5:37:00 PM
From: Sandie	of 5650

There's a big focus on this thread to PSINet's earnings, timetable for profitability, EBIT, etc. and then a corresponding incredulity when positive earnings surprises fail to move the stock. PSIX is NOT an earnings play, in my opinion. Here's my 2 cents worth: The ISP business --as a standalone industry-- is, in many ways, a regulatory creature. The ISP's as FCC-designated Enhanced Service Provider are exempted from local access charges, 40% of an IXC's cost base. This is a big free lunch which could be jeopardized by the current access charge reform efforts. The RBOCs are talking about metering ISP connections, kind of like an LD call. Wow! Talk about a shot to the head of internet growth. How much time would YOU spend puttering around SI for $.10/minute? Even in this "protected" arena, the ISP's have failed to make money. Witness the numerous retreats: from $20 monthly flat-fee service, giving up the retail market, etc. I believe ISP service will be absorbed by the RBOC's in due course. The market is reflecting this overall skepticism.

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