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Technology Stocks : Internap Network Services Corporation
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To: Dave B who wrote (397)5/17/2002 12:46:31 AM
From: Czechsinthemail  Read Replies (1) of 1011
 
But the customer list has always been blue-chip

While the customer list has always included blue chip companies, their customer list has actually been very diverse. During the heyday of the dot.com's, INAP was a haven for small tech start-ups, simply because it offers service that is a tech-head's dream. As the tech recession began to unfold, many of INAP's customers began to fold. That produced a serious churn that weeded out many from INAP's list of continuing customers even as they were out signing up new ones. Overall, I think they've done very well. When you replace a small customer than is going out of business with a huge blue chip customer that is uses more of INAP's services and is likely to increase its usage over time, that's not a bad trade-off.

I strongly recommend listening to the annual meeting (if they still have it archived at the InterNAP website). They specifically discussed a number of your questions. The revenue level of the average customer they lost was about 20% of their overall average. They indicated they are planning on about a 1% attrition in part because they are trying to find a balance in making the service widely available while trying to minimize uncollectable accounts. Some will certainly go bad, but most will work out.

I think if you listen to the annual meeting, you will become more interested in saving your pennies to buy more shares while they are cheap. Management said they will be EBITDA positive by the end of the year with money in the bank. By the time there is general agreement that they will do it, I think the stock will have more than doubled from current prices.

Good luck,
Baird
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