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

To: mts362 who wrote (3392)	12/1/1999 11:59:00 AM
From: JDN	Read Replies (1) \| Respond to of 15615

TO ALL; Difficult to assess?? Then why give any rating?? Or is that the reason for Neutral, meaning---we have no idea? JDN

To: mts362 who wrote (3392)	12/1/1999 7:21:00 PM
From: Teddy	Read Replies (1) \| Respond to of 15615

hi mts362, thanks for posting portions of that silly Bear Stearn's report. I do not recall ever reading such a poor excuse for research from "professonals." i will, of course, be sending them my resume'. I suspect that (this is a joke that some of the "long term" GBLX shareholders might get) the report was written after repeated attempts to obtain information from the lovely Jenny Chowderhead. anyway, to provide some balance, here are some excerpts (laws against reproducing the whole thing) from latest by the mighty Jack Grub at SSB:(Oh, in case anyone cares: Within the past three years, Salomon Smith Barney, including its parent, subsidiaries and/or affiliates, have acted as manager or co-manager of a public offering of this company. My take is that SSB knows GBLX and their deals better than anyone else and has a history of doing right for their clients. SSB is also my full service broker. GBLX: Joint Venture With Hutchison Positive; Reiterate Buy Salomon Smith Barney Monday, November 15, 1999 --SUMMARY:--Global Crossing Ltd.--Telecommunications Services GBLX announced a 50/50 JV w/Hutchison Whampoa called Hutchison Global Crossing (HGC) providing GBLX w/bldg-to-bldg connectivity in Hong Kong. Hutchison will contribute its fiber optic network & GBLX will contribute $350 mil of global ntwrk capacity & global data center related capability & $50 mil cash. GBLX will also pay to Hutchison $400 mil in conv pref'd stk. The transaction is expected to close by January 2000 & is expected to be EBITDA positive in Yr 2 of ops & will be accounted for using equity mtd. GBLX expects to contribute HGC to Asia Global Crossing JV w/MSFT&Softbank. HGC is connected to 600 buildings & will further penetrate data mkt in Hong Kong & will provide a gateway for GBLX into mainland China. GBLX continues to very aggressively assemble a set of global assets that is very valuable in the industry. We reiterate Buy & $70 target...... --OPINION:------------------------------------------------------------------ Global Crossing announced a 50/50 joint venture with Hutchison Whampoa called Hutchison Global Crossing providing GBLX with building-to-building connectivity and a voice and data platform in Hong Kong. This transaction is in line with the company's strategy to provide not only city to city connectivity but building to building connectivity on a global scale.... Hutchison's network is a 700 route km fiber optic network with generally 100 fibers strands, 9 voice switches, and more than 600 buildings connected in Hong Kong, and is Hong Kong's largest fully fiber optic network. Hutchison has 50,000 PSTN lines in service and provides private line services within Hong Kong which will be expanded internationally as a result of this joint venture, The buildings not only are connected onto Hutchison's network with fiber, but most also have fiber up the building risers, and are expected to grow to more than 6,000 by 2008. Hutchison provides origination and termination capabilities in Hong Kong and the second largest multinational corporation hub in Asia. In addition, Hutchison has one of the fixed line licenses in Hong Kong on which there is a moratorium until 1/1/2003 that will enable GBLX to land its subsea cable, construct its cable station and provide backhaul into Hong Kong. Hutchison already provides voice, data and Internet related services in Hong Kong. This relationship will provide a gateway for GBLX into mainland China as well. Hong Kong has the highest fixed line penetration and will allow Hutchison Global Crossing to quickly penetrate into the data market. The Hong Kong fixed line telecom market is estimated at $4 billion with data growing at an annual rate of 25%. The China market is estimated at $40 billion with data growing at a 50% annual rate. With the expertise from GBLX's web hosting, Hutchison Global Crossing can also expand Hutchison's existing Internet and e-commerce businesses and will establish the first global data center in Hong Kong which will connect to GBLX's existing and planned centers in North America, Europe, and Asia-Pacific. Already, GBLX in just the last several months has put together a very interesting set of assets. The Racal acquisition which was announced in October 1999 provides GBLX with a fabulous fiber network in the UK. The Asia Global Crossing joint venture with Microsoft and Softbank announced in September provides GBLX with anchor tenants on that network. In addition, GBLX was already building a network in Japan, and now, with Hutchison Global Crossing, GBLX has Hong Kong building-to-building connectivity and a gateway into China. Thus, GBLX continues to very aggressively assemble a set of global assets that is very valuable in the industry with a very strong foothold in Asia--typically a difficult market to access. The joint venture will be accounted for using the equity method of accounting, and thus, its results will appear below the operating income line. GBLX revenues and EBITDA will not be impacted at the consolidated level. Financial details and the near-term impact were not provided but Hutchison Global Crossing is expected to be EBITDA positive in year 2. ... NET/NET: This transaction with Hutchison is yet another example of GBLX aggressively moving toward reaching its goal of global building-to-building connectivity and further extends GBLX's strong foothold in Asia--typically a difficult market to access. We reiterate our Buy and $70 target on GBLX. ----------------------------------------------------------------------