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

To: Jeffrey D who wrote (4767)	3/7/2000 7:44:00 PM
From: Teddy	Read Replies (1) \| Respond to of 15615

more detail on Jeffrey's Boomberg interview from The Wall Street Urinal (i bolded parts) because a felt like it. (and my comments on tracking stock) Dow Jones Newswires -- March 7, 2000 Global Crossing CEO: Won't Consider Merger With US West NEW YORK -- Global Crossing Ltd. (GBLX) CEO Leo Hindery said Tuesday the company won't consider a merger with U S West Inc. (USW) if that company's planned merger with long-distance company Qwest Communications International Inc. (Q) falls through. "We can only assume that that transaction is going forward," said Hindery, speaking in an interview with Dow Jones Newswires. Global Crossing, a fast-growing telecom company headquartered in Bermuda, attempted to swallow U S West, a Denver-based Baby Bell, but lost to Qwest last May. Hindery declined to comment on whether Global Crossing is currently in merger talks with other telecom companies, such as Germany's Deutsche Telekom AG (DT). He did acknowledge, however, that Global Crossing had discussions with Deutsche Telekom "weeks ago." "We're not for sale. We're simply trying to run a company as best we can," he added. "We will always do what's in the best interests of our shareholders....If something occurs that would benefit our shareholders, we would consider it." (Corrected 4:27PM) Hindery, who was named president and chief executive of Global Crossing last week following the resignation of Robert Annunziata, said he expects the company to meet earning estimates. A First Call/Thomson Financial analysts' consensus predicts a first quarter loss of 36 cents a share and a fiscal year 2000 loss of $1.41. "We have incredible assets," he said. "Now, like anybody with great assets, we need to run them to make a profit and satisfy our customers. We're very serious about giving customers quality and breadth of service." The company, which will celebrate its third birthday in a week and a half, has "a bit of development to go in terms of undersea marine builds," which are underway, he said. Hindery reiterated Global Crossing's plan to launch a tracking stock for its data-center business in June. Hindery, 52, who joined Global Crossing's Web-hosting business a few months ago, is a former chief executive of AT&T Corp.'s (T) cable-TV and Internet unit. -By Janet Whitman; Dow Jones Newswires; 201-938-5248; -janet.whitman@dowjones.com Oh, my comments on the IPO of the tracking stock: Right now, Global Crossing Ltd shareholders own 100% of Global Centre. As informed shareholders, we know that the company plans to spend over $2 Billion US dollars to expand that portion of the business this year (maybe $4 Billion over 2 years). There are about 5 ways they (we) can come up the money: 1. Do something illeagle (steel, sell drugs, money launder...). I don't think we should do that. 2. Issue more debt (sell more "high yield bonds"). I think most people feel safe with our current debt level, and we might need some quick cash (currently just over $1 Billion) for something special that might come up. Also, looking at cash flow, i think we could get a much lower interest rate if we waite 6 to 9 months before going to the debt market again. 3. Issue more Global Crossing Ltd stock. I would have not problem with that if the stock price was much higher, but at less than $85 per share it would be bad for long term GBLX shareholders. 4. Create a tracking stock and sell a portion to "the public." If any reasonable person looked at EXDS (a global Crossing customer) and Global Centre (100% owned by Global Crossing) they could conclude that they are both in the same business and (give or take a couple of $ Billion) should be worth about the same. Well, if you try to do a sum of the parts on Global Crossing Ltd, there's like $10 to $20 Billion missing (hey, maybe EXDS is valued way to high, maybe GBLX is valued way to low. Maybe both.) If we create a tracking stock, The Market (weather right or wrong) will tell us what it thinks Global Centre is worth. Now, we have 3 objectives: A. Raise the needed cash for Global Centre's planned expantions. B. Ruduce risk, C. Have the value of Global Centre added to Global Crossing Ltd. If we create a tracking stock for Global Centre and sell a portion to the public (let's say 20%), we accomplish 3 the objectives: a. A quick couple of $ Billion to fund expandtion. Global Crossing (GBLX shareholders) still owns 80% of Global Centre. b. We (and Mr. Market) don't have to wonder how Global Crossing is going to get the money required to expand. c. We get establish a value Global Centre. That value is (if The Market is efficient) reflected in GBLX share price (because it includes 80% of Global Centre and less fear of debt). BTW, IPO of a trcking stock has been proven to work: see Sprint (Sprint PCS), Time Warner (Time Warner Communication)....