Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : PSIX up 26.5%, Takeover(?) -- Ignore unavailable to you. Want to Upgrade?

To: RedCrystal who wrote (4633)	8/2/1999 10:04:00 PM
From: telecomguy	Read Replies (1) \| Respond to of 5650

Yes it does of course......by the way, very interesting stats but to be honest with you, it seems that test results can often be very inconsistent from one test to another depending on who does the test, how the test is done, etc.etc. Not to discount the accuracy as I do not really follow the network performance aspect of IP Carrier business but probably the more important issue is Psix's business model and the market they are in. Even as I was positive that Psix was right in persuing an aggressive expansionary strategy through acquisitions, getting out of the retail to concentrate on corporate, buying their own circuit, in the back of my mind, there was always some concern with respect to their ability to integrate all these disparate, far-flung acquisitions carrying their own "baggage", corporate culture and mgmt. This is no mean task as I've seen countless number of good companies go down in flames when they undertook growth by acquisition strategy and stumbled badly. Fact is, acquiring, integrating, and streamlining a new acquisition is one hell of a challenge that most mgmt fail to pull off. So again, I was watching their gross margin very carefully to see how they were performing (after all, their role as a consolidator/acquisitor was a key part of their strategy). The bottom line is that the Gross Margin hardly showed any improvement over the past few years if you ADDED BACK the cost of "owned circuit" to the gross margin calculation since primary reason for the APPARENT improvement in their margin was simply due to leased circuit cost coming off the top line as they migrated traffic on to their owned (IXC, Atlantic, Pacific, etc.) circuits. The mgmt came out very proud with the statement that their EBITDA "finally" turned the corner into positive territory. Unfortunately this is a spin accounting in the sense that real efficiency (as reflected by the true Gross Margin including the depreciation & amortization) has not been improving. Bottom line is that they still lost more than comparative quarter last year......so they are still bleeding heavily and the question as to whether their business model can ever turn a profit has not been answered. But hey, in this day of Internet IPO, at least Psix has revenue growth going for them and I suspect their price isn't going to collapse as long as their top line continues to grow -- at least until the general Internet market collapses or Psix start running out of cash. As long as Psix can continue to borrow to cover their operating losses and continue to acquire new companies and make news, the fact that this "emperor" may not be wearing any clothes won't necessarily become apparent for long time.......enough time hopefully for everyone on this board to make lots of money! Besides, the junk bond investors keep pouring money into Psix so they must be onto something about Psix that I am not aware of --- after all they are the expert who must have studied Psix under a microscope before lending them billions (of course the same investment bankers also lent Far East Asia, Russia and South America more money than could ever be justified -- resulting in meltdown!)

To: RedCrystal who wrote (4633)	8/2/1999 10:39:00 PM
From: Curtis Gruber	Read Replies (1) \| Respond to of 5650

Well, not the close I think we all envisioned, but interesting to note in the last 33min of the day: 1)Positive: We traded 197,500 shares(roughly 20% of our days total) Negative: We dropped 1 11/16. 2) Postive: Last trade before close was a 28,000 buy(That's a $1.4mill buy) Negative: Average trade dropped from 1268 to 1064(actually that may be a positive as smaller retail trades accounted for the selloff while the bigger blocks kept us floating in a nice range all day.) 3) Neutral: Number of trades all day totaled 602, up until that last 33 min. wherein 301 trades flew by. Since I can't decide if this is a positive or negative, it is neutral. 4) Unsure: 300 Jan. puts traded today. Not sure why someone would buy puts so far out, esp. at the market puts. (Scratching head) all in all not a bad day, hate to close below $50.5, had been a nice support, of course I hate to close in the red, but there was some nice size buys, which implies confidence in PSIX by institutions even amidst some broader market worries. regards, cg