I'm reposting this with some comments/thoughts/questions. Please feel free to add your thought, provides, of course, that the original author does not reject.
WHAT WE KNOW:
-We know that WCOM Wireless is gone. That's 2,600 employees less with savings of $200,000,000.00 year. Asset value ~ $700,000,000.00
My estimation of saving from personal cost will be approx. $100 million (45,000x2,600). And IMO, WCOM can get at most $500 million proceeding from the sale, could be as low as $300 million.
-We know that layoff's are coming - I think 16,000 sounds wacked - maybe ~ 8 - 12 k with the wireless group. That should add ~ $600,000,000.00 minimum to EBITA - I also think the effect on moral will be minimized if most are contract employees
-We know MCI and WCOM are to be rolled together - thats $800,000,000.00 in intergtroup allocation savings added to EBITA
this sound to be out of air, justification?
-We know that the MCI dividend is gone = $284,000,000.00 right to the bottom line
-We know WCOM has EBITA = $7.1 to $7.5 billion and MCI $.9 - 1.1 billion EBITA
-We know that WCOM still has the premier international and national data networks.
-We know that there are customers of KPN and GBLX ( and others) looking for new providers of top line data services.
-We know that there are many talented experienced IT engineers and technicians looking for work right now.
-We know the $5 billion backstop is pretty much a done deal
WHAT WE DON'T KNOW:
-We don't know how much of a success the Neighborhood will be but I think it will add $2 - $3 billion to annual revenues. No analyst but Vic Grover even mentions this. It's a dynamite plan - end of story.
it's worrisome if WCOM have to pay ILEC per minute, what about Internet usage, I for one, leave the phone line connected all the time.
-We don't when the bandwidth glut will become a shortage but we do know that Internet bandwidth usage still growing @ 80% per year - thats almost 600 % in three years with capex being cut back across the industry. I never did buy into that "anything associated with the Internet will grow exponetially forever" argument but obviously it is a huge, pretty much new, technology that isn't going the way of the buggy whip tommorrow either. These views swing from one extreme to the other when the truth is somewhere in the middle. Personally 10 years ago I didn't know what an Internet was - now I'm on it all the time. Its an integral part of business and whatever now and it's still growing with a bit of evolving to come yet.
Most tech analysts must now be suffering psychological problems with high levels of guilt and confusion right now. This is likely why it's hard to find an original though amongst them. You can't trust a point of view like that. I seriously wonder if one reason the analysts are so constantly negative on WCOM is that their ego's can't take the blow it would be to be blatantly wrong once again! I give Vic Grover high marks because he seems one of the few willing to think on a rational original way in the face of overwhelming, run away, negativity.
If WCOM can pull this off, what will be the upside potential? $20, or $50, let's vote, justify your vote! |
