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Technology Stocks : IDTC Options Players (losers and whiners)
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To: md1derful who wrote (361)2/23/2000 1:59:00 PM
From: Tony A. Matthews  Read Replies (2) of 593
 
The hysteria probably refers to the cash being used to fund "the plan" which is going to such and brilliant business case we're all going to shake our heads and say "brilliant - now why didn't I think of that".

My guess is that this new found freedom will allow IDTC to invest heavily into building out it's network which is the greatest cause of deteriating margins in the wholesale business. The fact is that IDT leases international lines from other carriers on the presumption that they can resell to carriers who don't have facilities or particular routes and use economies of scale to make money. The problem is that competition is pretty intense and owning the infrastructure will definitely improve margins. My issue is that this is a commodity game. I always believed that their rapid wholesale growth would be a good platform to move to retail and corporate value added services. I've yet to see any evidence that this is where they'll go.

Now if IDT can successfully make such a transition I believe the stock price could easily go over $100. Witness valuations of global carriers such as IN and ENT. After witnessing IDT's great "visionary" management for over 2 years now, I no longer believe they can make this transition. It would be naive to think though at this stage that there isn't a plan (you can't just sell an asset like NTOP without one) and who knows they just might surprise us after all.
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