To: John Carragher who wrote (2299 ) 7/6/2000 3:31:44 PM From: Shaw Read Replies (1) | Respond to John, I added to my position in Exodus, after a coast to coast call to Exodus, late this morning. The call confirmed my earlier posted projections as to the soundness, of Exodus's game plan. Apparently Exodus's earnings model will have no problem carrying the 1.2 bil. in recent funding. They are growing at the rate of 6 customers a day. The new Santa Clara facility is filling up nicely. Business is extremely strong and they still have much of the world left to service i.e. Asia and Latin America. Margins in quarter 1 are 29%, quarter 2 are 27% due to one time expenses, quarter 3 will be back to 29%. Exodus feels they offer depth and breadth of service over the competion. I think they are doing the right thing, that of investing to grab all the market share they can, while market share is so readily up for grabs. I don't think their existing business will fall off due to dot com. attrition, because they service the main players in that business, not the small players, that won't survive, also the large dot coms only represent a portion of Exodus's overall business. If the street is worried about the 2% drop in gross margins for quarter 2, I don't think the concern is justified. Exodus explained, they incurred one time expenses from the building of data centers and marketing their Mirror Image product, a content distribution product. Also according to Exodus, Merrill Lynch still has a strong buy on the stock, apparently there was some confusion, in this matter. Lastly, Exodus only went to the market to raise 600 mil. but ended up raising 1.2 bil, because the market was that excited about being on board. I personally feel that companies like Exodus are the few quality, high growth opportunties of size left in this market, that haven't yet been bid to the Moon.
