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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: Clean who wrote (452)3/17/1999 12:22:00 PM
From: M. Frank Greiffenstein  Read Replies (2) of 15615
 
Mixed bag...

I think purchasing FRO is a great idea, but I am not so sure about the purchase price.

With FRO, GBLX will have a strong presence in the USA. This is the biggest broad bandwidth market in the world, and the only weakness in GBLX as an investment thesis was the lack of presence here. They had to rent capacity from QWST, a tricky proposition given QWST is their main competitor. Do you want to rely on a competitor to give you a presence in the market you want to compete in??

Is GBLX paying too much for FRO? I don't know, I am not bright enough to figure that out. It comes down to (a) how much would it cost GBLX to build its own network here, (b) how long would it take to build it and (c) how long would it take to integrate operations. If the costs associated with building US infrastruture is greater than the purchase price for FRO, then it is a bargain.

DocStone
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