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

To: Sir Auric Goldfinger who wrote (2374)	7/20/2000 3:34:40 AM
From: Raymond Duray	Read Replies (2) \| Respond to of 3664

Hi Auric, While I generally am in agreement with the bulls on this thread, I do want to say that your reasoning is quite sound and well considered. Thanks especially for the Moody's piece on EBITDA's shortcomings. I've printed it out for easier reading. In regards to your stance on EXDS prospects, having read of your concerns for a time now without comment. Lately, I had two very unoriginal thoughts come to mind. First, J.M. Keynes said that it is suicidal to be rational in an irrational market. This I would believe to be the Sisyphean task you are involved in. Secondly, Warren Buffett said that in the short run, the stock market is a voting machine, but that in the long run (irrespective of Keynes' other famous quote) it is a weighing machine. A top line of greater than $1B next year seems pretty 'heavy' to me. Especially in comparison with some of the flyweights that have dominated dotcom land or the recent cast of dubious characters in the genomes arena. As regards EXDS, I view profitability as a certainty down the line, unlike the prospects for AMZN, who will be constantly battling for the retail dollar. EXDS sells to the cognoscenti, and while I was at first skeptical that they could charge 10x what other web-hosting firms did without significant churn, the latest CC had two very compelling arguments in favor of the company's continuing existence and prosperity. First, it is no longer simply web hosting, the list of ancillary services is as long as my arm. Secondly, and this is key. The churn rate is less than 2%, according to the company. Allowing for puffery, they're still hanging on to customers who are paying a premium for the service. This is not the mark of a company that is in trouble. You may be among a very small crowd, including Cheryl Strauss-Einhorn, who just don't get it. But she's got a great excuse, she's a commodities journalist and I'd have to say, fairly clueless about high-technology. Auric, I think you're right to be skeptical about any number of companies in this space, I just think that you've chosen the wrong target. Let's talk about why INTC has not been able to create the IDCs that it so prominently touted last fall. Now that would be an interesting target to see you cover. Or, for that matter, how about a little satellite play that EXDS is peripherally involved with, Mirror Image and XLA. Now there's the kind of meat a bear could really dig his teeth into. :) Best, Ray