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Technology Stocks : The *NEW* Frank Coluccio Technology Forum

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To: Frank A. Coluccio who wrote (2387)3/29/2001 11:23:33 PM
From: GraceZ  Read Replies (1) of 46821
 
Did you see the interview with Ravi Suria?

thestreet.com

Brett D. Fromson: Ravi, let's start with your take on the telecom services sector.

Ravi Suria: OK. The biggest problem for the telecommunications industry is clearly the fact that it is overcapitalized. Now, overcapitalization for an industry is not necessarily bad if it comes through the equity side.

Brett D. Fromson: Meaning via stock offerings?

Ravi Suria: Yes. Because then you just have a lower return on equity. At some point, it catches up with you. But your balance sheet is still fine. You can operate and survive. The problem with excess capitalization when it comes from the debt side is that if your business model is unable to support the debt, you go bust.
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