PSIX up 26.5%, Takeover(?) Message Board

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

PSIX 63.67

+7.2%

Dec 9 3:59 PM EST

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To: Charlie Yang who wrote (955)	4/25/1997 4:55:00 PM
From: Sandie	of 5650

If you hang out a sign "Selling quarters for $.24" people will line up around the block. Your qtr-over-qtr revenue growth will be spectacular. The flaw in this Business Plan of course is profitability or the lack thereof. PSINet's convergence on break-even is asymptotic: they appear to be chasing infinity. Why infinity? Because technology obsolescence will hound them into unending network upgrades, new capital for network and POP expansion. Of course, their access to capital is not so infinite. I think the MCI analogy is a flawed one. When MCI began chipping away point-by-point at AT&T's market share, LD was still way up the commodity curve. Telecom service offerings were still fragmented by regulatory fiat into protected islands. We're witnessing today massive global integration, consolidation under brands, and one-stop shopping. If the question is "Will PSINet persist as a standalone entity?" the answer in my mind is clearly "no". The real question is how much are they worth and to whom?

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