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Technology Stocks : ACNS: American Communications Services
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To: PAUL ROBERT ST. ONGE who wrote (68)1/4/1998 11:53:00 AM
From: Mahesh  Read Replies (1) of 102
 
Paul, you have your views and I have mine. Despite your statements and conclusions, I understand CLECs well, the types of infrastructure an equipment they are putting in and the types of equipment they will need in future. MCI has conceded after 800M+ loss that making money in local is a losing battle. RHCs are not going to roll over and play dead. The Clecs that were more profitable or in first tier cities were snapped up such as Brooks and MFS. ATT is still mulling their local strategy - maybe they will acquire this month as such opinions were arrived at from statements by one of their senior executives. ACSI with infrastructe in third tier cities - with huge cash burn rate - difficult to place loans even at 13.75% - equipment that may require huge amounts of additional otlay for possible upgrades, 30 million plus shares and losing up to 30 million per quarter - Great buy? give me a break.

With your price target of $30, that is market cap of 1 Billion. I wonder in your intesnsive research what market cap to sales ratio you assigned to this company. The infrastructure, the FOTs, ADMs, Switches , the fibre, the rings - I understand well, I also understand the manufacturers, drawbacks of some of this equipments etc. Bulding infrastructure is not a rocket science. Revenues from zero to 10 million after such huge outlays in equipment is not an amazing feat. What would be amazing is if they can go from 10 Million to 100 Million - which is what they need to break even. In the interim, they continue to build deficit. And these "Planned Markets" that you talk about are fair game for the the bigger and more established rivals and are not going to generate the revenues for ACSI that it needs.

Good luck with your $30 target!. I prefer to short.
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