So many times the question of "what does the Street know that we don't know about GX" pops up on this thread, and in my own mind. Ever since the first rise to ~60 pts by GBLX, and then its dive to 23, the same question. My answer at that time was "I think the big guys have figured GX is targeting their lunch"....therefore the subsequent problems with the share price. And then the second rise to ~60 pts....till today.
The first rise was enthusiasm and marketeers pumping the company, and when the FRO//US West// Global Marine Systems acquisitions were all announced, the big debt picture emerged, the futility of an immediate buyout price boost was lost, and the momo players bailed out. Only when MSFT and SoftBank actually invested GBLX did I feel comfortable getting back in, which I did in a big way (@about 24 pts).
Then the price ran up to ~60 again. I just *knew* this company was a sound investment now, yet the share price started falling. Then the Bob Annunziata departure amid the DT buyout speculation (even on the media the buyout was being hyped, which never materialized), and down went the price.
Now, the facts are on the ground: the second high was, to my mind, a PURE HYPE for the departure of several big investors to depart along with Bob A. Several Canadian banks made many many millions they had to report and this is why I know about their windfall. And it all seemed to all revolve around the Bob A. "goldenboy" departure. I cannot blame them for departing if their presence was predicated on Bob being there to look after their money. His departure would naturally be accompanied by their departure....(that is the most kind thing I can say, but you can see too that Bob leaving and their leaving might have been more deeply complex. I know when they left because the banks had to report their buy and sell prices, and an easy crossover to dates for that year was quite simple). Bob was quite nervous at the last CC just one or two business days prior to the Racall purchase (cash!) which was so devastating to the share price, trading of the stock was stopped for them to make the announcement...I suspected they were actually *trying* to trash their own share price...I was very, very, very suspicious, and then a few days after that, Bob was gone. WoW! Does anybody remember those events? I do not trust Winnick to do me any favors. I do trust him to grow GX, his own interests are so involved here that he cannot afford to do otherwise, it would appear. Just like I do not trust politicians, I trust nobody on the Street except as far as I can discern where their OWN interests lie...(where their own interests lie, so will they ! <g>)
Anyway, what does the Street know that we don't know?
As far as the fundamentals about this company, I would like to propose they are ABSOLUTELY CLUELESS as to Winnick's capabilities, partly due to jealousy (denial), and partly due to the herding instincts they employ to invest the money under their care (this latter point is quite possibly why the LVLT play has been so successful in maintaining a strong share price, but SO DID WCOM until it finally collapsed under its obviously declining fundamentals!)
Just as WCOM collapsed due to fundamentals, EVENTUALLY GX must rise due to its fundamentals. I do not mean to trash LVLT as a company, please do not take offense at my continually pointing out (what I believe to be) its lack of merits as an MNO. It is just that their business model does not reach out Far Enough to catch the brass ring. They took the middle of the road approach (subsea and terrestrial)((in contrast, GX terrestrial systems are acquired to bring traffic to their subsea system)), and this is why EXDS will be (and are now) relegated to a second tier player, better as a merger than as a stand-alone company. GX cannot readily leverage its assets as a merger now, because they do not target a one-size-fits-all strategy...this is why Hindery did not get along with Winnick, I believe. He was hired to sell GCTR, and when that had transpired, he got the boot (he seemed intent on telling Winnick how to run the company, he felt that was *his* job). As well, his 250M EXDS commission dwindled to less than ~36M during the few short months awaiting closure of the EXDS deal...if that helps anyone here feel better about their own GX losses....his GX stock options never vested due to their price being somewhere near $40, and GX share price was always lower.
They have taken on the EXDS play as the TOP player in its class, and GX is TOP player in its class, and nobody from a large, one-size-fits-all telecom is willing to pay the price for the primo product capabilities of GX. The truly demanding customers are willing to pay for what is most profitable to them, and for this reason some of the top tier customers are already on GX (Swift, Goldman-Sachs, Merrill Lynch).
Enough,
Martin Thomas |
