Time for GBLX Random Notes, my irregular, bi-monthly (more or less) series of miscellaneous observations on the stock that this thread monitors:
1. Earnings on the morning of the 18th, hmmm. If earnings come out showing no big sequential revenue growth trend, story could get buried amidst all the hoopla of option expirations Friday. Management might prefer that. Why else target that date (anyone know how long IR has identified that date)? As far as I know, GBLX hasn't announced many big new capacity signings or sales of dark fiber. Besides, company is deep in its infrastructure building phase, integrating acquisitions, rationalizing assets, spending money. I'd be shocked if this were be a big earnings or revenue quarter.
2. On the other hand, I've been of the view, with others on the thread in realistic if reluctant agreement, that earnings for GBLX don't really mean much during 2000, as the company connects more and more of its crossings, hits its inter-city terrestrial links and signs up more web hosting customers for GC. In short, as the parts of its business model are realized.
3. Now, as for a clue as to how powerful Hutchison Whampoa is (as I began to realize working with my Australian client in its HK telecom activities), Fez's post is very illuminating:
Hutchison Whampoa Ltd. said it named Peter Wong chief executive of Hutchison Global Crossing Ltd., its newly formed $1.2 billion venture with Global Crossing Ltd., a U.S.-based Internet-protocol telecoms services provider. Wong was previously fixed-network director of Hutchison Telecommunications (Hong Kong) Ltd.Peter Yip was appointed chief technology officer...
Folks, this is Hutch calling the management shots of a piddly $1.2 billion jv when GBLX has at its disposal Winnick, Cook, Annunziata, Casey, Scanlon and Cohrs, not to mention Hendry and the crew he's bringing to GC.
4. Let's see, how many potential spin-offs: GC, Asia Global Crossing, Hutchison Global Crossing....Is it time yet to call GBLX the "broadband company incubator"?
Re. the spin-off structure, as mentioned a couple of weeks ago, the optimal structure from GBLX's point of view (do we hear aligning stockholder interests with those of corporate) is to sell a modest percentage (10%-20%) of stock to the public, value of the new entity is reflected in GBLX's share price if not yet its balance sheet, the new company gets to run and prove its stripes and, down the road, maybe spin-off more//the rest to GBLX stockholders. GBLX stockholders could get in on the initial IPO with a directed share offering, something Merrill Lynch has done quite frequently with companies it brings public.
5. I would hate to see GBLX get acquired by DT, BT, GE or TE or any other alphabet amalgam. Like harnessing a potential greyhound to an elephant.
6. Why is GBLX stock going up? Let's count the reasons: strong NAZ--a rising tide eventually lifts even the heavy boats; GBLX had been left behind and is catching up--fair period of consolidation after the summer and fall trashing with FRO/USW, then GBLX recovered well and has been resting; probably some of the institutional stock that had been waiting to come out post IPO and financings has been sold; and as someone noted, broadband plays have been doing well recently; and, finally, as Robert has noted, with all the consolidating and alliance building and pipe laying, it is CHEAP! (we hope).
7. Speaking of pieces of the business model--which by the way might be another reason earnings announcement is coming later in the season (remember, GBLX is a foreign company, doesn't have to report 10-Qs with the rest of the joes). Have you noticed how its business IS getting more complicated? During 1998 and early 1999, all GBLX had to do was report how much fiber optic cable had been laid, and capacity sales of that fiber. There's a lot more going on now: Asia Global Crossing (how to mollify MSFT and Softbank re. IPO timing and build out that net server market), FRO's--oops--Global Center's web hosting, FRO's long distance biz (sigh!), HutchWhamp jv, Global Marine, venture portfolio to monitor, debt and convert issuance, integrating Racal, and climbing all those risers in London and Hong Kong, and so on.
8. What else? Oh! Wouldn't it be cool if Hendry and GBLX tech team could figure out a way to identify the hack attackers and route the traffic jamming mode back at the conspirators?
9. Nextwave--Second Circuit Court of Appeals stays the bankruptcy court's decision that would have prevented the FCC from preparing the Nextwave spectrum for re-auction. Stay tuned.
10. Story on big internet growth in Africa during 2002-2004. When you start from a small base....Big story in NYT Science Section on Tuesday re. possible return of huge drought to Sahel region. Glad GBLX is primarily an underwater cable layer. GBLX better hurry and get its giddyap in gear to hook up Pan Am Crossing to Latam--lots of net and intranet use down there, private and commercial.
11. Wouldn't you love to see--to visualize--all the GBLX pieces, now and as more are acquired, the way Annunziata sees them in five years' time?
Good luck on earnings, as if it matters <gg>.
Steve |
