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

To: matt dillabough who wrote (3391)	12/1/1999 11:48:00 AM
From: mts362	Read Replies (2) \| Respond to of 15615

Here are Bear Stearn's comments: ------------------------------------------------------------------------------- GLOBAL CROSSING: INVESTMENT OPINION COVERAGE OF GLOBAL CROSSING WAS INITIATED WITH A NEUTRAL RATING ON DECEMBER 1 AT THE PREVIOUS DAY?S CLOSING PRICE OF $44. In less than three years, Global Crossing has grown from a small investor group to a company that could have a significant impact on the global telecommunications industry. In 2000, including the effect of the recent acquisition of Racal Telecom, Global Crossing will have an estimated 3M customers, 13,000 employees, $4.9B in revenue, and $1.7B in adjusted EBITDA. By 2005, management expects to address a worldwide market opportunity of $1 trillion through internal growth, partnerships, and acquisitions. GLOBAL CROSSING IS NOT AN UNDERSEA CABLE COMPANY ANYMORE. In 2000, revenue from shore-to-shore cable systems will represent less than 25% of revenue. The acquisitions of Frontier and Racal Telecom change the company?s position in the industry. Management plans to build or acquire local-national-international facilities in the most important markets in U.S., Europe, and Asia. The company will offer data-oriented services to businesses, governments, carriers, and IP- centric entities, such as Internet services and web hosting providers. THE EXPANDED STRATEGY CARRIES GREATER RISKS. As an undersea cable system builder and operator, an optimistic outlook for Global Crossing hinged simply on predictions of declining costs and rising demand for international connectivity. By expanding the scope of activities to include national and local markets, as well as a wider range of services and customers, management changed the investment thesis. For example, in the U.S. the company is a now a more direct competitor with AT&T, MCI WorldCom, Qwest, other new national network operators, and soon, the Bell companies. OUR CAUTION ON THE STOCK REFLECTS THE POTENTIAL FOR EXECUTION PROBLEMS. Fron- tier and Racal Telecom operate in the two most competitive telecommunications markets in the world. Both companies are second-tier participants. Management must improve the position of these two companies while overseeing a myriad of other businesses and ventures around the world. The company?s ambitious strategy and penchant for dealmaking make the risk/reward difficult to assess. -------------------------------------------------------------------------------