Investment in Russia and Eastern Europe Message Board

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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Real Man who wrote ()	8/21/1998 8:22:00 AM
From: Racso	Read Replies (2) of 1301

GTSG [NASDAQ]:the last Russian short sell.GTSG is a Russian problem, not yet a European growth story. Despite enthusiastic broker reports, GTSG will undoubtedly suffer from the Russian crisis. The Europe telecom growth story will not turn into a net profit story least until 2001. 77% of revenues and almost 100% of operating cash flow still comes from Russia. Russian operations are not exciting with flat/slowing growth rates and drop in cellular subscribers. Revenue growth rate was slowing down even before the devaluation and the company is writing down receivables. GTSG looks severely overpriced compared to other US listed telecom operators in Russia which have crashed in the last few days: it trades at 2.5X VIP [vs 1X in mid July], 11.3X PLDI [vs 6X in mid July] and 10X ROS [vs 3X in mid July].This is not all, unfortunately. About 18mm shares are expected to come out of the lock-up period on Sep 30, that equals 33 days of trading. Finally, Montgomery Asset Mgt, which owns about 12% of the stock has announced it will reduce its position during the year. Any thoughts?

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