Great post from someone who went to the meeting.
From: "billbony" <wstaby@...>
Date: Tue May 30, 2006 5:45 pm
Subject: Back From Meeting billbony
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Glad I attended. CH is not quite so dull in person as he is over
the phone or on a webcast.
IMHO, the purpose of this morning's press release and 2-day
conference schedule is simply to spread the word about Covad. Not
sure why the pps plummeted today other than the fact that the press
release caused people to focus on negative net income for 2006 and
not on CF+ (which Chris Dunn confirmed would happen in the 4thQ). In
short, NOTHING HAS CHANGED FOLKS!
There was alot to absorb today but I'll give you my Biggest
Positive, Biggest Negative, Biggest Aha! and, finally, clarify one
fact:
Biggest Positive
The presentation by Claude Tolbert and Dave McMorrow, though long,
indicated to me that Covad has (finally) developed a very clear idea
about how its various products will be targeted and sold i.e.
Enterprise vs. Consumer, wholesale vs. direct, etc. I'm not trying
to be an apologist because the GoBeam acquisition was indeed badly
muffed, but, let's face it,the transition from being solely an
access provider to being a service provider would be hard for ANY
company to pull off.
Biggest Negative
NONE! Other than the fact that the lock-up period for the $10mm
common equity investment by ELNK expires in (roughly) October, I see
nothing other than a negative development on the regulatory front
and no additional LPVA customers (i.e. slower-than-hoped growth) as
potential setbacks to the pps going forward.
Biggest Aha!
I finally understand what bonded T-1 is and why there is good growth
and margin in this business for Covad. In essence, they're not
simply re-selling T-1 lines from AT&T etc. (explains the good
margins) and their corporate customers really need to up their
bandwidth (explains the good growth). To me this establishes a
great foundation for the company.
Fact Clarification:
The 2006 - 2009 revenue guidance DOES include Earthlink LPVA
although with no more than the original 11 cities.
I'm a little sketchy on this but I believe that the revenue guidance
DOES NOT include the new 6.0 DSL offering through AOL.
I'll kiss your ass in Macy's window if any analyst downgrades Covad
based on today's presentation.
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