"it fun to have an occasional shout-a-bout"
Gosh, I must have misplaced my sense of entertainment somewhere.<G>
1. A real estate developer may lease a parcel for 20 years and this puts the onus of development costs (building, utility connections, parking lots etc) onto the lessee. The lease would amount to an IRU for 20 years, the amount of time necessary to completely ammortize the capital expenditures (this may vary country to country, dk).
A Fiber Optics IRU on GX is for 20 years, and similar reasoning is applicable. The tenant may attract additional service-centers, additional traffic, etc.
If the competition is selling IRUs, it certainly behoves GX to do the same, or lose customers. The bandwidth capacity is not at all an issue at this point in time, and the bet is that even if it does become an issue, a dollar today is worth 2 tomorrow. Getting the sales mix right (for those who need full service and those who are big enough to service themselves) would be a job for management, I presume.
2. WRT the idea of using call options to hedge a longterm position, I suspect this would be prohibitively expensive.
As was stated on this thread by someone who avoids threads with too much turmoil, and possibly this explains that poster's recent absence, any company with large issuance of convertible debt will be shorted to lock in the yield against a falling share price. Your comments that the early runup in price could have precipitated a plethora of short selling (by these bond holders) would account for the present size of GX short positions, and these short positions will remain as long as funding for telecom remains closed. By watching the funding for telecom we will know readily when GX share price must begin ascending (although it may rise prior to this). I do not see how call options would be financially viable under this scenario, but I may be missing something here.
Regards,
Martin Thomas |
