Hi Bob - thanks for the elaboration. Personally, I do not like to belittle people, be they buysiders, sellsiders or fund mgrs --- not even Mr Sagawa! Rather, I think we should focus on the reason(s) behind their action.
From what you have said, ALA was not his informant --- or sole informant anyway.
IMHO, financing is the mother's milk of buildout, so I suppose any contraction in the capital mkt can have dire consequence to the weaklings. However, it is fairly clear that every vendor has some programme to entice potential customers. I'd go so far as to assert CSCO can't escape this, except it is using a different vehicle called "equity investment."
Unless people can tell exactly how aggressive these packages are, or demonstrate the failure rate, I think there is a lot of unknown here. But I'd be hard pressed to believe that rivals know the details of the package, unless the customer tries to play two competing bids off each other. I would think ALA at best could tell the victor of the bid was better, but no the detail, until the deal comes out on paper or in filing. Just a guess though.
There is no doubt the vendors who finance buildout may have to eat some losses. Thus far, I know CIEN and LU have some issues here. That said, NT has not shown any significant damage due to her programme. Hindsight 20/20. When the US bailed out Mexican debt, there was a lot of distractors too!
Btw, I was tempted to 2nd guess the fund mgr's intention, but it is fairly meaningless. So, I shall refrain from further comment on this person
Thx again
best, Bosco |
