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: cdtejuan who wrote (2984)	10/30/1999 3:10:00 PM
From: Tom Gebing	Respond to of 15615

PR 10/29 DCR RATES GLOBAL CROSSING'S CONVERTIBLE PREFERRED STOCK OFFERING 'BB+'

To: cdtejuan who wrote (2984)	10/30/1999 9:45:00 PM
From: mthomas	Respond to of 15615

Skip, thanks so much for the informative post from Yahoo GBLX thread. Really straightened out some points for me, esp. the type of investors getting the "45 call" on this company. Seems to me we have a $45 floor rather than a $45 barrier. Glad to see the momentum players have less reason to be here, just makes it easier to read the movements if they are gone. Hope the shorts see the light and recognize the $45 is probably going to be hit soon, now that the BigBoys have another $1BB piece of this action........MT

To: cdtejuan who wrote (2984)	10/30/1999 11:46:00 PM
From: LLCF	Respond to of 15615

Nice wrap up on the Convertible Pref deal... I agree with your positive assessment... we can thank the U.S. Govt [SEC] for us not being able to get in on the deal, the company is saving tons of cash by skipping around the regulations, but it means they can't sell to us because we need protection from the Govt. I'm not saying the securities laws are bad, it's just life... company is in overdrive and doesn't have time to dink around with this stuff IMO... and with huge money banging the door down why not??? I do take slight issue with this: <First off, Preferred Shares represent EQUITY. The institutions who supply these funds will own (have a call on) a billion dollars worth of our company. They are not lending money to Global as banks and other debt holders would or do. A somewhat theoretical but IMPORTANT concept.> Although the pref represents equity, it is more often valued like a bond... they usually have no voting power unless a dividend is missed, and have downside only to the extent the company is in trouble and can't make the payments. Also, the preferred does NOT represent common stock, the owners of it won't necessarily own a Billion dollars of our stock [common]... they do have a call to buy a billion worth at about a 30% premium to todays price. Why do companies do a pref stock rather than a bond?? In the U.S. preferred dividends paid to corporations by other domestic corporations get preferential tax treatments... a corporation buying preferred stocks pay less tax on the dividends than on debt of the same coupon. But GBLX is not domestic is it? Interesting. Another comment... usually in these convert deals, the derivative portion [calls] have a way to find their way onto the market. This may put pressure on the stock as it rallies, and on the premium in GBLX's vol market represented in the retail market by the CBOE, AMEX, and any other exchange that lists options... hopefully the LEAPS get crushed down so we can buy more cheaper. DAK