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 : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (1455)	8/4/1999 8:03:00 PM
From: quidditch	Read Replies (2) \| Respond to of 15615

I'm curious about this statement: "The collar, then, is protective not only of FRO shareholders but, in unwanted fashion, those of GBLX." How so? I'm not sure I am following your logic here. Please advise. Other posters are addressing the collar in terms of the floor/average trading prices at which point FRO has the right to walk away from the deal. I was looking at a different issue: In the context of a post on declining prices in the entire broadband/last mile sectors, I was musing in my post that GBLX's share price may be suffering an additional undertow, that as its price declines due to market factors, the FRO merger price becomes more and more dilutive to GBLX holders as its share price currency becomes cheaper and cheaper. Thus, investors may be bailing as they see GBLX's float and FRO's merger price become too high. Hence, there may come a point at which the collar, if the cancellation clause is exercised, saves (the remaining sailors on the ship <gg>) GBLX shareholders from such a highly dilutive issuance for the FRO merger that no ROR or ROE would, in any foreseeable investment horizon, result in an attractive EPS or PE. Just a function of the fact that, when GBLX's merger currency was high, FRO was cheap. Not so cheap today! Btw, QWST in the same position. There are a lot of dealmakers out there thinking twice as the world has changed somewhat since April, and may change further as we head deeper into the late summer. FWIW. Best. Steven