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Technology Stocks : Intermedia Communications ICIX -- Ignore unavailable to you. Want to Upgrade?

To: SecularBull who wrote (240)	2/8/2000 8:46:00 AM
From: SecularBull	Read Replies (1) \| Respond to of 313

From Raging Bull, interesting ICIX metrics: By: YouveGotMoney Reply To: 213 by YouveGotMoney Sunday, 6 Feb 2000 at 7:50 PM EST Post # of 230 ICIX value today $192 to $229 IMHO $229.6 is my calculation of the value of ICIX today based on the market price of ICIX's DIGX holdings = $64.6 per ICIX share, or about $15 more than ICIX's share price, plus $165 based on a comparable revenue multiple for ICIX's national data CLEC business. More conservatively, even after backing out all debt, ICIX would be worth about $192 based on my analysis as detailed below. $97.25 (today's DIGX share price) x 61.5M DIGX shares out = $5.98B market cap for DIGX. $5.98B x ICIX's 81% ownership = $4.84B value of ICIX's stake in DIGX. $4.84B / ICIX's 75M total shares out (includes unexercised in the $ options) = $64.6 of DIGX value held per each fully diluted share of ICIX. That's just the value of ICIX's DIGX holding alone. ICIX is also a leading independent national data CLEC, selling at only about 2.6x trailing 12 months' sales but is growing as fast as MCLD which sells at about 12x and faster than national data CLEC SPLT at about 24x (recently agreed to be bought out by MCLD). DIGX returns are i believe consolidated with ICIX. DIGX contributes about $.59 per ICIX share of sales by my calculation: $.89 DIGX trailing sales per share x 61.5M DIGX shares = $54.7M revenue x ICIX 81% share = $44.3M / 75M ICIX shares out = .59 cents per ICIX share of DIGX revenue. The rest of the $17.10 per ICIX share of revenue is the ICIX national data CLEC business. $17.10 - .59 DIGX revenue = $16.51 of non-DIGX revenue per ICIX share. If you give that revenue a multiple of 10x (actually was 12.6x for MCLD and 24x for SPLT but i'll be conservative and allow for a discount), $16.51 x 10 = $165. Then add in the value of ICIX's DIGX holdings per share of $64.6 = a total value of $229.6 based on ICIX's DIGX holding's market value and a comparable multiple for a national data CLEC ICIX has significant debt but it is delvering and will be getting $200M new capital from Kohlberg, Kravis and Roberts, plus $100M from Microsoft and Compaq (forming a jv with DIGX) and $400M with an option for $400M more from a bank consortium. ICIX is going to offer about 8M of its DIGX shares monetizing a small portion of this asset and delevering ICIX's balance sheet. If anyone can help delever leverage skillfully you would think it would be KKR with their roots in LBOs. But to be more conservative in valuing ICIX, if you back out all the debt -- which would make ICIX unlike a many developing telecoms/CLECs which use some debt financing to help fund infrastructure and get big fast -- that would only take off $37.3 per share from my valuation: $2.8B debt / 75M shares out and in the $ options = about $37.3 per fully diluted shares as i calculate it. $229.6 - $37.3 = $192.3 as the value today of ICIX with all debt backed out. All figures i calculated based on data in either YHOO Finance Profiles and for shares out, StreetAdvisor.com: streetadvisor.com. Now apparently there is some discount because the DIGX is held by ICIX, but there is IMO in a perfectly efficient and rational market the market value of DIGX and multiples of comparable national data CLECs should be reflected and realized in ICIX's price IMHO. All just my personal opinions only; do your own due diligence. Comments?