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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: Teddy who wrote (31)8/20/1998 11:52:00 PM
From: PaperChase  Read Replies (1) of 15615
 
Teddy. With IPO's and secondary offerings, the underwriters are allowed an overallotment of (additional) shares in case the stock issue becomes oversubscribed. In the old days, the exercise of an overallotment was considered a bullish sign for a stock yet today it is commonplace.

Also worth mentioning, GBLX will begin to report revenues for the first time this quarter in connection with their first fiber project.

I don't think anybody will dispute the future need for bandwidth. However, the future increase in bandwidth will be satisfied not only by laying additional fiber (which is very expensive), but by the use of Dense-Wavedivsion Multiplexing (DWDM) devices over fiber connections. There is a danger that the forthcoming 96+ channel DWDM devices will create a glut of bandwidth if end-user demand for bandwidth does not increase in lock-step. If I remember correctly, GBLX's AC-1 project is fully subscribed but what happens when they upgrade their DWDM equipment and double or quadruple capacity practically overnight? What happens when competitors do the same? I guess I have made my point here. This is the industry/technology risk.

I am bullish on GBLX and as a good investor I always keep an eye on the risks. These risks apply equally to other companies as well like Qwest.
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