TEN Reasons to Buy GBLX Now: (revised 10/16/99)
Hope this brightens your weekend. Still as valid as when I first published it a month ago, when GBLX was at $23. Updated for your enjoyment......
1. Frontier merger. This acquisition is immediately additive to earnings. It serves to link Global Crossing's undersea cables with Frontier's extensive network of terrestrial cabling across the United States. Also, Frontier brings services to the Global table. Global Crossing is not satisfied with operating the toll booth on the information super highway; they want to repair the road and service vehicles moving along on it. Frontier enables Global to do all that.
2. Microsoft and Softbank backing. These two giants (in market cap alone) will ensure success for Global Crossing. If you look at the structuring of their arrangement, you realize they are forced to pony up more and more money as the market cap of Global grows. The effect will be a logarithmic increase in GBLX share price for the next three years.
3. "Lock" on insider sales for six months past merger. Both Frontier and Global executives have pledged to keep 100 % of their shares for at least six months after the merger closes. In the recent Switzerland Conference, Winnick said "I'm not going anywhere and neither is my money. You ought to have great confidence that every thing I do is tied to investor return."
4. Insider ownership. Winnick (AKA - "The Rainmaker") owns 25% of Global Crossing. What is good for him as a shareholder is good for you. Enough said.
5. Fidelity Asset Management (FMR) ownership. FMR recently announced they have established a 5% stake in GBLX. They bought GBLX stock from $22-$28 a share. Did you?
6. $500 million stock buy back. Global has pledged to buy back at least half a billion...that's with a "B", folks...of it's own stock after the merger. What better way to emphasize the bright future the board of directors sees for this company.
7. "First There" advantage. By being the first company to be a true global telecommunications enabler, Global Crossing has a distinct advantage shared by many extremely successful companies. Everyone else has to catch up and (take it from me) that's a harder and harder thing to do in an industry where barriers to entry are a mile high and getting higher every day that interest rates go up.
8. Visionary leadership. Look at who is at the top of the Global pyramid. If you don't know them, you better learn who they are. They are the future faces of telecommunications in the world. Winnick recently said "They will be writing books about what we have done in this industry."
9. Lowest cost structure, most efficient business model, and technology only makes it cheaper. Global Crossing, when the network is complete, will have the lowest cost structure in the industry. It is THE most efficient business model I have ever seen. No longer do customers have to pay tolls for bandwidth as they transition across carrier networks...it's like Club Med for bandwidth (you pay only once for everything). As WDM technology gets better, Global's cost of providing bandwidth shrink exponentially, and they make money at an exponential rate.
10. Cause you want to have $1,000,000! This company will make at least $1.00 in earnings next year and $3.00 in 2001. What will the P/E be then? Still over 100 and you will be in Nassau or Hawaii, happily cashing your monthly money market dividends and wondering what color the sunset will be as you toast your good fortune.
Buy now or kick yourself for the rest of your life. |
