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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: Ally who wrote (9948)2/20/2001 12:10:13 AM
From: Ally  Read Replies (1) of 15615
 
As for long term debt, Shortinterest.com wrote

"As of September 30, 2000, Global Crossing was carrying $5.3 billion in long-term debt on its balance sheet and shelling out $112 million in quarterly interest expense. Cash and cash equivalents stood at $1.2 billion."

Seems to me that shortinterest.com is trying to scare investors by casting a negative impression on debt, interest payments, and GX's cash level. It would be wrong to draw such negative conclusions without

(a) reviewing debt/equity ratio
(b) reviewing how debt was serviced from Q3 to Q4
(c) comparing cash flow in relation to the interest payments
(d) making realistic assessements that GX is only 85% completed and cash flows start low, and should grow.

There is nothing wrong with long term debt as long as it is serviceable from cash flows. Also, it would be premature and incorrect to cast any judgment on debt without (a) consider it in relation to shareholders equity and total assets and (b) to review how the debt has been serviced.

GX has not published (or, I can't find it) a balance sheet and a cash flow statement as at December 31 2000. Without looking at the balance sheet and the cash flow statement, it would be presumptious to make any comment on GX debt.

A relevant question will be: "What is the maximum potential cash flows for the fibers already installed." If anyone has articles to answer this question, please post.
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