Qwest Q must think we are idiots. Or babies. Or on the take. Or unable to do math. Or incapable of challenge and skepticism.
I can't think of another reason why Qwest would say what it did on its call today, to wit, that business is better than expected in the first quarter and there is no problem doing a financing but that the company will be in violation of its debt covenants beginning next quarter.
Think about it. Qwest springs on us that it learned it will be in violation of the covenants after looking at its current business. But that its current business is better than expected? In other words, given the old plan and opinion, Qwest would have definitely been in violation next quarter given that its business had been much worse.
In other words, Qwest dissembled when asked before about violation of covenants.
This stuff is outrageous. So is the expectation that it can easily do a financing, although there are some banks so on the hook to Qwest that they may have to lend to it because the banks would be hurt so badly if Qwest failed.
Let's get some things straight. Qwest, like Winstar , XO Communications , McLeod and 360 Networks before, is telling us that it will soon be in violation of covenants but that it has no problem raising money.
As this call went on instant messages were lighting up on every hedge fund desk asking, "Can you believe these guys?," yet the lapdog analysts who were on the call blessed it.
Disgusting.
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