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Technology Stocks : I-Link Inc (ILNK), VoIP Telephony

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To: Michael Paul Langley who wrote (282)11/21/1998 2:32:00 AM
From: Michael Paul Langley   of 417
 
Overall, their business plan has had serious flaws in it. They shouldn't have introduced such ridiciously low long distance rates last year when their competition (and the marketplace as a whole)would support much higher prices. Therefore, all they have accomplished is an excelleration of the product cycle (long distance rates)as their competitors are charging near or the same rates today.

By lowering the rates they did grow their revenues from zilch, however; they have been selling below their costs of service (i.e. $5,020,650 for telecommunications revenue and a corresponding telecommunication network expense of $5,095,263). Additionally, the pull in about the same revenues for marketing services as the pay out in marketing expenses (includes total commissions, and the cost of providing training, promotional and presentation material, and ongoing administrative support to independent representatives).

I have no idea where the economies of scale supposedly kick in for ILNK. The SEC documents are a must read for any current IR or investor in ILNK to get the true scope of their financial woes. Further discussion of ILNK's financial situation is hereby encouraged.
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