SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : XO Communications (XOXO)
XOXO 34.990.0%Dec 21 4:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Larry S. who wrote (650)10/30/2001 10:06:08 AM
From: rrufff  Read Replies (2) of 1018
 
Actually, that article is a simplified traditional view of the bankruptcy world. In a recession, you have to look at it, like the banks look at Argentina or past Latin or 3d world debt. There is so much owed that creditors have to work with debtors, unlike you or me when we owe and can't pay. Often times, the debtors have more "say" or "power" than the creditors.

That's why COVD was able to cram down a deal very favorable to shareholders even though you could make all the arguments, made in this article.

Valuing debt at a discount - you get very approximate enterprise valuations of $5 B for GX and $2 B for XOXO. Are those realistic values? If we have a V recovery, I think it is a reasonable speculative value, but you don't put more than a small part of your portfolio in this.

I think both GX and XOXO will continue to buy back debt at a discount. Potential takeovers will bid bonds at a discount. Debt holders will have to consider the potential for getting what the market is valuing the debt today and what someone working hard to keep it as a going concern is wiling to pay.

Another factor working for shareholders is you have the "BIG PLAYER" i.e, McCaw. If you had just a bunch of non-shareholder management, XOXO would have been in Ch. 11 already. Those buying today under a buck are betting that McCaw will use his power to make sure this thing salvages value for shareholders.

I do agree with the part of the article that says treat this like an option.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News