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Strategies & Market Trends : The Amateur Traders Corner -- Ignore unavailable to you. Want to Upgrade?

To: steve susko who wrote (999)	9/15/2000 1:06:20 PM
From: Tom Hua	Read Replies (1) \| Respond to of 19633

Steve, will do. BTW, if this market does not improve in the next 2 hrs, I think we'll see major sell-off in the last hour of trading. Regards, Tom

To: steve susko who wrote (999)	9/18/2000 2:35:29 PM
From: Tom Hua	Respond to of 19633

Steve, these may be of interest to you. I'm sure you saw them. Lehman Brothers: PSINet Inc(PSIX) 2 - Outperform Analyst Meeting Summary We remain cautious on shares of PSINet following Friday’s investor conference due to continued competitive, execution, and financing risk. However, we see potential for strong upside in the shares given industry consolidation and further signs of strength in the hosting business. Risks we highlight include (1) the need for $600m in financing to fund 2001 plans, (2) the need for a strong 4Q00 to hit revenue targets, and (3) the need for 25-30% incremental EBITDA margins to meet EBITDA guidance over the next 6 quarters. At 2.3x 2001 revenue, we see the potential for considerable upside in the shares based on a sum-of-the-parts valuation in an environment of industry consolidation. Bear Stearns: PSINet Inc. ( PSIX $11 3/4 ) Buy Company Update MarketCap: $2.2 Billion Index: NASDAQ Composite, Russell 1000 PSIX had its analyst meeting. It pulled back its financial guidance for revenue and EBITDA for 2H and beyond. Revenue for 2001 goes from a range of $2.6-2.9 billion to $2.4 billion. EBITDA for 2001 goes from $325 million to $200 million. The principle reason for the shortfall is an unexpected shortfall at the Xpedior subsidiary, part of the acquisition of Metamor. Relatively slow growth in Metamor and slower-than-anticipated growth in the transaction solutions business. The company continues to see meaningful price competition in its access services business. The other issue is the fact that PSIX needs an incremental $600 million to fund itself through the end of 2001 beyond what it has now. PSIX expressed a relatively high degree of confidence in being able to obtain the funding either through selling non-core assets or establishing additional lease lines with vendors and commercial lenders. PSIX is a unique strategic asset. We think the valuation today (PSIX has a $5.4 billion Enterprise Value) only reflects the about the value of what its hosting and co-location business would be worth if it were an independently traded enterprise. That will do about $500 million of revenue next year. In hosting, the average hosting company commands about 10-12x revenue. We think the risk/reward is appealing. We would like the PSIX situation to what Intermedia offered investors over the past 3-6 months. For investors who have a 6-12 month time horizon and a significant risk tolerance, we would be buying this stock today. Regards, Tom