More on Level 3, further questions about Gilder's "unbiased selections"
Level 3 CEO Blasts Tech Guru Gilder, Questions Picks
By Johnathan Burns
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Visibly upset Level 3 Communications Inc. (LVLT, news, msgs) Chief Executive James Crowe lashed out on Tuesday at technology guru George Gilder, whose comments sent the company's stock down 16.1% in Monday trading.
Crowe, speaking at the UBS Warburg Global Telecom Conference, said Gilder's unfavorable report was filled with errors.
"Normally I'd let that go by, but this report is filled with demonstrably erroneous (assumptions)," Crowe said.
Gilder's report, Crowe said, contends that Level 3 will be displaced by competitors due to the competitors' supposed technologically superior networks. For starters, Crowe said, Gilder asserts that competitors have installed high-speed optical equipment made by Nortel Networks Corp. (NT, news, msgs) that Level 3 does not possess.
Actually, Crowe said, no one yet possesses high-speed fiber-optic equipment because it has not yet come on the market. Additionally, Crowe said Level 3 has the empty conduit available to install such equipment on its own network while its competitors have "patchwork" networks.
Crowe said there are only about 12 empty conduits that span across the nation. Eleven of those belong to Level 3, he said.
Crowe said Gilder's report came on the heels of Crowe's refusal to pay a "hefty bill" to speak to a group of investors arranged by Gilder.
"About two months ago, I got a call from Mr. Gilder who invited me to speak at one of his investors conferences," Crowe said. "A few days later, I got a very large bill. It sounded like paid advertising to me."
Crowe then questioned Gilder's "pans and picks," in which Gilder chooses the companies with the best technology.
"I would challenge him to disclose the fees he's paid by the companies in his picks and pans," Crowe said.
Meanwhile, Crowe said, Level 3 has raised $13.8 billion in capital and is prefunded to free-cash-flow break-even. Crowe said the company expects 2001 revenue of $1.7 billion and growth margins close to 50%.
Level 3 stock was recently trading at $33.50, up 10.7%, or $3.25, on volume of 4.6 million, compared with average daily turnover of 4 million.
-Johnathan Burns, Dow Jones Newswires; 201-938-2020 |
