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

To: mthomas who wrote (2003)	9/20/1999 9:18:00 PM
From: Teddy	Respond to of 15615

I received my copy of the "Supplement to the joint proxy statement/ prospectus" today. I played around with the basic ratios using the Pro Forma Balance Sheet as of June 30, 1999 on page S-18. As the notes state, the number are just there for "comparitive purposes only." The numbers are kinda skewd by a few things like Global Crossing not listing $905,469,000 of Restricted Cash and Equivalents with Current Assets, but listing $158,304,000 of Accrued Construction Cost as a Current Liability (that is in accordance with GAAP, but if you think about it: the Restricted Cash is the money set aside to pay the Construction Cost. They are doing it correctly, it just looks funky at first.) Also, i think it would be reasonable for the combined company will push some of Frontier's short term debt out. By itself, Global Crossing's Current Ratio is an incredably strong 2.99 .Most successful businesses operate with current ratios in the range between 1.50 and 2.00 (a higher number, of course, is better). Global Crossing has virtually no short term debt. Global Crossing does have (what some perceive as) a considerable amount of Long term debt. Strange thing is, Global Crossing's (long term) Debt Ratio of .57 is not bad for a regular company and actually very low for a telecom start up. For comparison, .50 is normal for regular companies and some of the "Blue Chip Telecom's" are over .85! (a low number is better). Now, when we add in Frontier, the current Ratio drops a little (it goes in the wrong direction). I think i see something that skewd that, but even if it is true, look at the Debt Ratio of the combined company: it drops to .34 ! Anyway, what i am trying to say is that, no matter how you look at it, Global Crossing debt level is low for the industry and acceptable by any reasonable standard. With the addition of Frontier, the Balance Sheet gets stronger.

To: mthomas who wrote (2003)	9/21/1999 7:27:00 AM
From: AurumRabosa	Respond to of 15615

You call 12.2% junk bonds and LIBOR+3% revolving credit "superior?" Just open Barron's or the Wall Street Journal and see what others are paying for bonds and you'll see GBLX is at the trash end of the spectrum. What will they have to pay the next time they need cash? They aren't going to have any cash because they say they're not only going to take what little they do have and buy back stock, even though they're unprofitable, they'll have to borrow some more to come up with $500 million. If you buy back stock with borrowed money that's foolhardy. If you buy back stock with net profits that might make sense. >"...GBLX has one of the best business postures on the globe." Managers of unprofitable companies that buy back stock with borrowed money can hardly be called the best in the world.