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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: DWB who wrote (13052)8/2/2001 3:19:11 PM
From: changedmyname  Read Replies (1) of 15615
 
DWB... Don't want to think that i'm a permabear now on GX, but this is how these telco disasters have started... they cut revenues, then they don't recover and down they go. To me the story has changed, GX for months led investors to believe that the "story" was unchanged, that guidance was going to be ok, and that they were unaffected. Now they cut revenues and ebitda numbers. The same thing happened to TSIX and LVLT and all the other clec's (edit: obviously I know that tsix and lvlt are not clec's, but implying the telco sector in general). It all started with one bad quarter and then downhill from there.

So now there is truly a threat that GX could face debt troubles. The Merrill note today notes that they still have a cushion, but that it is significantly smaller. Any further cut in revenue expectations could easily lead to a need for more cash. They probably can get the cash, but at what cost to shareholders (further dilution?).

So for me, and obviously several other shareholders, the "story" has changed, and certainly not for the better.

To me it's a crapshoot here. I can't and won't believe anyone that tries to spin the news yesterday as a positive. GX no longer is offering guidance for 2002, and said they probably will after they finish their budget (per the conference call). Just last quarter it was what, 30% a year for the next 5 years?

Jason
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