McLeod, Inc. (MCLD) ---- IPO Message Board

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Technology Stocks : McLeod, Inc. (MCLD) ---- IPO

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To: Ronald P. Margraf Sr. who wrote (925)	10/17/2001 9:56:22 AM
From: BWAC	Read Replies (1) of 1418

<Let me be honest with you. How long can a company loose money before it goes bankrupt? One quarter, 2,3 4 a year. There is a thing called interest payments on the money borrowed. When all your profits go to pay the interest, what's left. Borrowing. Your never out of debt an sooner then later you have to close shop. Sorry but that is the reality of doing business.> Okay? While you have a certain point, you aren't living in the real world of how a business is created. And what follows goes for a business as small as a local restaurant to as big as AOL. WHEN you start a business, any business, it is invariably normal that the costs to start/equip/staff/depreciate/operate/evolve/grow the business will exceed the profits you make for a certain length of time. The time frame depends a lot on the amount of capital infrastructure and outlays that are required upfront. MCLD's cost to build itself were over $5 Billion of equipment and infrastructure. It is capital intensive. You got $5 Billion laying around to start up a company? I don't. Almost no one does. SO it must be financed? Right? Your local restaurant might show a profit the third year. Your local lawn service might show a profit the second year. MCLD might show a profit its 10th year. You do know that MCLD is EBITDA positive already? You do know that MCLD is about $100 Million in cost savings or revenue gross profit from covering their interest payments? You do know that MCLD is still growing its customer base? You do know that MCLD is still a $1.2 Billion in current sales developing company whose profits were never ever yet budgeted or planned to exceed costs at this stage in its life? You do know that MCLD's investors were telling it to grow and grow fast despite the immediate losses that would occur? You do know that these same investors did an immediate flip to "where are the profits now" overnight a few months ago?

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