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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: trainleaving who wrote (11282)5/17/2001 7:30:25 AM
From: Bill Fischofer  Read Replies (2) of 15615
 
Re: TSIX

Once again it is illuminating to listen to TSIX's conference call and compare it to GX's recent call to truly appreciate just how far ahead GX is in achieving breakaway. A few points from the TSIX call that are worth mentioning here:

1. TSIX recently brought in a number of senior-level executives from LVLT. One has to wonder what would motivate folks to make this switch.

2. TSIX remains a refuge for ex-MSFT managers. It's clear that Maffei brought over a lot of staff with him when he left the MSFT CFO position to take over as CEO of TSIX. While a CEO understandably likes to work with those he's familiar with and I'm sure these are capable managers, it's not clear what particular expertise these folks have in the global telecom business. Compare this to GX whose executive ranks are packed with industry veterans from AT&T and elsewhere. Perhaps this explains the recent LVLT infusions.

3. Although TSIX didn't say so explicitly it seems clear that they've been buying capacity from AGCX to substitute for their scaled back 360Pacific plans. Coopetition seems very much the norm these days.

4. Despite its problems, TSIX isn't likely to go bust anytime soon--certainly not within the next 12-18 months. This is good news for GX shareholders worried about cheap assets being bought by other players. TSIX still claims they're on a path to becoming free-cash-flow positive in 2002, and I'm inclined to give them the benefit of the doubt. The upside is that if demand is so strong that even TSIX can make it then GX is a gold mine in the making.
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