Global Crossing Is Back & PINK..GBLCF..
By Bill Mann
January 16, 2004
From the files of "things the telecommunications industry doesn't need": Global Crossing (Pink Sheets: GBLCF) recently emerged from bankruptcy, and it's set to compete again with a whole host of carriers -- some that also have gone through the "balance sheet carwash" of bankruptcy, and others that have not... yet.
Global Crossing, you may recall, collapsed after the piles of revenues it claimed to be generating during the telecommunications boom in the late 1990s turned out to be partially based on phantom capacity swap transactions. The company thus turned $80 billion in market cap into pennies, and descended into scandal and recriminations when it was found that insiders had been selling massive amounts of shares, pulling more than a billion out prior to the company's collapse.
Shareholders who held on until the end saw their shares cancelled, rendered worthless. Somehow Global Crossing's management escaped the ignominy that the folks who ran Enron and WorldCom into the ground achieved. I can't really explain it, because the fraud was nearly as brazen.
Those owners and that management are long gone, still sadly free from some "opportunity for reflection" that a jail cell would provide. But the company itself has survived -- its creditors agreeing to accept pennies on the dollar -- allowing Global Crossing to be reincarnated with newly issued shares and a clean balance sheet. The company once again should be recognized for its excellent timing: It has won some contracts to provide backbone services for companies engaging in Voice Over the Internet Protocol (VOIP).
Client companies are praising Global Crossing's ability to provide pure end-to-end VOIP, rather than the cobbled-together solutions offered by AT&T (NYSE: T), Sprint (NYSE: FON), MCI, and other backbone carriers. The biggest competitor for Global Crossing in this regard seems to be Level 3 (Nasdaq: LVLT). Equipment vendors such as Sonus (Nasdaq: SONS), Lucent (NYSE: LU), and Nortel (NYSE: NT) have seen a substantial ramp-up in VOIP revenues associated with its official status as "the next big thing."
Ah, but all of this excitement over VOIP doesn't mask something else in the telecommunications industry. There is still way too much competition, and far too much capital being spent for the size of the present and appreciable future markets. What the emergence of Global Crossing and later MCI will do is simply make it easier for them to compete against companies that haven't gotten a do-over on their debts.
VOIP is a new market, but it's only cannibalizing existing ones for the carriers. That doesn't strike me as a scenario to get that excited about.
And a favorite .....
Message 19701208
The Real Scandal Is Global Crossing - Not Enron
March 10, 2002
by Tom Barrett, Editor@ConservativeTruth.org
Why has the press ignored one of the largest bankruptcies in history, one which eclipsed the Enron debacle in many ways? Could it be because the head of the Democratic National Committee made $18 million from the Global Crossing scandal, selling all his stock just before the company collapsed?
While Enron has become a household name, Global Crossing is unknown to most Americans. Hardly a news report is aired without a mention of Enron. Seven Congressional committees are investigating that failed company. Yet Global Crossing is hardly mentioned by the media elite, and Congress seems to have no interest in investigating the causes of this much more significant bankruptcy. I wonder why?
Mention the following facts to almost any American, and see what reaction you get. My guess is a blank stare. Most Americans only talk about (and think about) what the liberal media tells them is important. Global Crossing’s bankruptcy was the fourth largest in America’s history. Far more employees’ lives were ruined by the collapse of Global Crossing than were employed by Enron. No one (except the employees and retirees whose finances were devastated) seems to care. Why?
Terry McAuliffe, Bill Clinton’s hand-picked Chairman of the Democratic National Committee, invested $100,000 in Global Crossing stock. He sold it less than two years later, just before the company’s collapse for $18 million - an 18,000% profit! Surely this was an innocent coincidence. But it does remind one of Hillary Clinton’s remarkable performance in the cattle futures market, a very risky area of investing in which even seasoned professionals lose millions. McAuliffe may face criminal insider trading charges stemming from the astonishing profits he made. Yet "investigative journalists" are staying away from this story in droves. Why?
Global Crossing gave far more money to the Democratic Party than Enron gave to both political parties combined. The failure of Global Crossing’s federally insured Savings and Loan (which also contributed heavily to the Democrats) will cost U.S. taxpayers billions. NewsMax.com reports that Enron "had a cozy relationship with McAuliffe, ex-President Bill Clinton and other Democrats." Yet neither the press nor Congress are interested in Global Crossing. Why?
The media bosses are frantically sending reporters all over the world to investigate the slightest hint about any campaign donations George Bush might have received from Enron. They’ve made much of the fact that Enron officials appealed to the White House for help in their last days, while almost totally ignoring the fact that the Administration turned them down. But no one is asking McAuliffe and the Clintons how much Enron’s huge contributions influenced the decision of the Clinton Administration to underwrite the financing of a now defaulted loan granted to the government of India for a nuclear reactor power plant. Why?
Liberal TV and newspaper groups have tried desperately to tie top Republicans to the Enron scandal. Nothing of substance has emerged from the millions they have spent in this effort. Yet it is well-known that Terry McAuliffe did "political work" for Global Crossing founder Gary Winnick. After his receiving his windfall profits, McAuliffe set up a golf outing for Winnick and then-president Clinton. Winnick later donated $1 million to the Clinton Presidential Library, which is actually a Clinton slush fund to be used however he wishes. When we consider McAuliffe’s documented role in selling government favors for campaign contributions during the Clinton years, we have to wonder just what Global Crossing got for the $1 million they gave to Clinton. Perhaps the donation helped Clinton make his decision to give the company a $400 million Pentagon contract. No one is asking these questions. Why?
I think it is obvious why the media has all but ignored Global Crossing, while treating the American public to a blitz of coverage about Enron the likes of which have not seen since the O.J. Simpson trials. The mass media is incapable of objective reporting. They have become the Public Relations arm of the liberals, the Democrats, and the Socialist Party. Over 92% of the reporters, editors and producers in the mainstream media are registered to vote either Democrat or Socialist.
So we should not be surprised when these "unbiased" newspeople scream for blood at the slightest hint that the President or other Republicans might have been close to Enron officials. And we should not be surprised when they ignore a much bigger story, one with facts instead of innuendo, because "their" people are involved. Liberals shriek in outrage at any attempt by the corporations which own the news outlets to influence the news. Yet they are willing to roll over and play dead, like any good lap dog, when their liberal masters are in trouble. |
