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Technology Stocks : Exodus Communications, Inc. (EXDS) -- Ignore unavailable to you. Want to Upgrade?

To: Shaw who wrote (2330)	7/12/2000 4:53:03 PM
From: Sir Auric Goldfinger	Read Replies (2) \| Respond to of 3664

In fact it's a question of cash burn and months to live just like AMZN.

To: Shaw who wrote (2330)	7/12/2000 9:55:56 PM
From: donnacat	Read Replies (1) \| Respond to of 3664

Web Hosting . . . Exodus provides co-location-based Web hosting and managed network services for companies with mission-critical Internet operations. Exodus expects to grow revenues at a 101% CAGR 1999-2004. According to the Wall Street Journal Exodus may buy Global Crossing's Global Center web hosting subsidiary for $6-$7 billion. The deal would help create enormous scale in web hosting and could also give Exodus direct access to Global Crossing's international fiber network. Exodus's market dominance in co-location hosting and rapid movement up the managed services value-chain should make them a key player as the Internet Infrastructure And Services industry consolidates. Investors will react positively to both the growing economies of scale of the proposed merger, plus the cost synergies that could be derived from linking Exodus centers to Global Center's international fiber network. Exodus would pay $6-$7 billion for Global Center. Global Crossing had previously announced it was considering a tracking stock for its hosting subsidiary. If the reported deal were all in stock this would imply roughly a 32% equity stake for Global Center. However Exodus recently raised over $1 billion dollars in debt and announced a $2 billion shelf offering and proposed $750 million revolver, which could also be used to partially fund the purchase, potentially lowering the Global Crossing stake to the 25% reported in the Journal. Expect web hosting floor space to more than triple during 2000. Eventually this should lead industry consolidation that will award a premium to those companies that have dominant scale, a competitive cost base, and a position at the high end of the value chain. Exodus is adding the value added services to support premium pricing. The reported combination would further accelerate Exodus's growing dominance from a scale and share point of view. Costs could be lowered based both on scale economies and based on access to the Global Crossing transport network. It should also further concentrate scarce web hosting expertise in the combined entity increasing "economies of skill." Demand will continue to accelerate for high-end Web-hosting and managed data services as successive portions of the economy convert to e-business. While the ranks of companies claiming Web-hosting prowess are legion, we believe Exodus has achieved singular status and scale with its laser-focus on co-location and managed services for high-end, mission-critical Internet operations. Exodus's growing worldwide network of Internet data centers will increase its competitive advantage this year as international hosting demand accelerates and Web-focused U.S. companies expand overseas. The five key investment points for EXDS shares are rapid Web-hosting industry growth, sector leadership, substantial barriers to entry, accelerating profitability, and an experience-rich management team. Rapid Web-hosting industry growth. Expect 77% CAGR in dedicated server and colocation web-hosting industry revenues. The explosive growth of e-business is the primary driver for the Web-hosting industry. IDC expects the Internet economy to grow at a 86% CAGR 1999 to 2003. Large as well as small enterprises, however, lack the in-house scale and expertise that Exodus can offer to manage network and data center operations. Exodus estimates that it can provide nearly a 6:1 cost advantage in operating a mission-critical. Sector leadership. Exodus is the category leader. Exodus hosts the Websites of Yahoo, Excite, priceline.com, and USA.com, and has over three times the floor space of the next largest competitor. Exodus also hosts websites for enterprise customers including Merrill Lynch, Nordstrom, Johnson & Johnson, Sun Microsystems, British Airways, and The Gap. Exodus is the single name identified with high-end Web hosting. We believe this brand creates a strong first-mover advantage. Barriers To Entry. The Exodus Internet Data Center (IDC) model has scalability and barriers to entry. Exodus has spent nearly $500 million to build 21 IDCs in 14 cities since 1996, including 10 during 1999, and plans to build an additional 17 during 2000. This wide geographic distribution would be difficult to replicate, and is critical in our view, for high-end customers that require proximity to their data operations. Accelerating Profitability. Exodus is well down the path to profitability that new entrants are only embarking on. Exodus reached EBITDA positive in the first quarter of 2000. Currently 14 of the company's 21 IDCs are generating positive EBITDA. Expect Exodus to exit 2000 at over a 10% EBITDA margin in the fourth quarter, around 25% by the end of 2001, and over 35% long term. Exodus maintains profitability through service quality and value-added services. Blue Chip IT Industry Management. Exodus has recently undergone a rich infusion of blue "chip" blood into management team. Chairwoman and CEO Ellen Hancock joined Exodus in 1998 following over 30 years of management experience at IBM, Apple, and National Semiconductor. Recently appointed president and COO Don Casey was previously president of Wang Laboratories, and also held executive positions at Lotus, Apple, and IBM. CFO Marshall Case was previously CFO of data storage company Auspex Systems. Executive vice president of worldwide sales Sam Mohamad was previously vice president of Direct Sales and Marketing at Oracle and was president of Sales and Marketing at Genuity (formerly GTEInternetworking). Executive vice president for engineering Morris Taradalsky was vice president of the business systems division at Apple Computer and spent over 18 years in engineering and management at IBM. CEO Hancock's 2% ownership implies substantial "skin in the game." Management and directors overall accounted for 8% of outstanding shares as of June 2000. Above from 2020 Insight - -thought it would be of interest. donnacat