Al, thanks for your feedback regarding the PP's. I do differ, however, with you on numerous points.
<<1) Sutro is setting up a private placement of FNET preferred stock. The conversion of these shares will be at a FIXED price, which will thus have a relatively small impact on the share price. There should be little or no impact on the FTEL share price, only on that of FNET, and of course only after FNET start trading.>>
Fixed at what rate? .25? .50? $ 1? $2? That makes a big difference. Also, how is it that you have information that is not public? Wouldn't that be considered insider information?
Why would you say that "there should be little or no impact on FTEL share price"? FTEL and FNET are essentially part of the same company (FTEL owns about 75% of FNET). They are so much the same that the SEC requires FTEL to claim FNET's earnings as part of its own !
Selling part of FNET is, in essence, selling part of FTEL, IMO.
I have no idea what FTEL's share price will do, but I do know that FTEL's interest in FNET will be less after a private placement and that shorts will probably be hawking it when conversion time comes near. Of course, if FTEL actually produces on its promises, the stock will not fall further, but if they don't. . .
<<2) FNET owes FTEL mucho dinero; so although the bulk of the PP will go towards new JVs, more countries, other DVG sites, etc, FNET will be paying FTEL for what it owes to date, plus placing whacking big orders for DVGs. FTEL won't need a PP.>>
As I've asked before: Is FTEL signing for loans for FNET, or just lending them money? In that case, FNET expenses are, in essense, FTEL's. FNET's loses are, in essence, FTEL's, IMO. FNET's PP is like FTEL's PP as the left hand is getting money from the right and visa versa.
Overall, IMO, FTEL needs money and the FNET PP will only change that moderately.
<<I've been playing with some spreadsheets, and feel the FNET business plan is spot on. If they really had to, they could slip into the black in just a few months even WITHOUT the PP - but at the expense of sacrificing expansion and future earnings.>>
Are you intimate with FTEL and FNET's business plan? Based on past Officer releases, I'd say that FNET is years behind. They were first planning to have a IPO for FNET in 1997, weren't they? As far as the month to month plan, who knows what "the plan is" unless you have insider information?
<<With my model, beyond about 40 foreign DVG sites expansion and cash flow go ballistic. Plowing cash back into the business is the way to go.>>
And if you could collect .01 from everyone in the world, things would be great, too. But how do you get everyone to give you a penny and do it in a cost effective way? Whatever happened to the DVG demos from late 1997? There was talk about an impending storm but I have not yet seen anything come of these. I always doubted anything significant would come of them, and I stated so numerous times.
<<With the FNET PP, this process gets a huge kick in the rear, and FNET gets a super shot at the brass ring.>>
I thought the last PP was supposed to give them the cash. What makes you think the carrot won't just be pushed out further into the future? I'll reserve further judgement until I see what the quality of the last revenues were. Were they comprised of one-time fees? Were they accelerating the cash-burn instead of lessening it with the additional revenues?
FTEL: .84a
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