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Technology Stocks : GX Investors Thread
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To: BWAC who wrote (34)8/21/2001 9:09:08 AM
From: Sweet Ol  Read Replies (1) of 586
 
It is my understanding that writing down impaired assets is somewhat arbitrary and not that easy to do. Also it is somewhat optional. There is no reason for GX to write down their assets and make their balance sheet look worse until they have to do it.

My point was that if you assume the replacement cost (a rough estimate of the fair market value) is 50% of book value, then it is worth roughly the debt owed on it.

Now, that is not the same as saying the asset has no value. Clearly it is capable of throwing off a lot of cash. The question I raised is whether or not the cash generating value of the assets is worth $4.5B? In other words, will they generate more net profits than buying $4.5B of bonds?

I am uncertain about how to evaluate GX at this time.

Disclosure: I paniced and sold my considerable long position when the DoD news came out. I am debating whether or not to buy back now that I know more about the situation.

Best to all,

JRH
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