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Technology Stocks : PSIX up 26.5%, Takeover(?) -- Ignore unavailable to you. Want to Upgrade?

To: Curtis Gruber who wrote (5217)	11/4/2000 2:11:43 PM
From: Patrice Gigahurtz	Read Replies (1) \| Respond to of 5650

Curtis: read this PSI Venture link and let me know what you think. psinet.com Thanks PS: Of all the bad investments I've made over the years, and survived from, this is the one I should have avoided and didn't. Luckily I'll survive from this as well and I haven't had a year below a $3k loss in my life (yet) and PSIX won't change that, so thankfully this investment didn't deep six my $$$ principle. I wish I could share your optimism. The market is voting at $2 1/2. You would think that someone could figure out how to get a positive cash flow out of a company that can yield a billion dollars a year in revs.

To: Curtis Gruber who wrote (5217)	11/6/2000 1:52:15 PM
From: telecomguy	Read Replies (1) \| Respond to of 5650

Curtis, I am surprised to see you are still into Psix. I could never figure out how Psix was going to be profitable as their REAL Gross Margin never EVER exceeded 25% which is simply too low to sustain a full facility Carrier business. I say real because at the time I exited this stock, Kunkel was trying to convince me that their G.M. was improving but when I analyzed their financials (this was going back at least two years), the top line GM % was only improving because they were converting Leased Circuits into "Owned" circuits and were amortizing/depreciating their owned fibre BELOW the operating line. Of course, I pointed out to Kunkel that this was really NOT improving the G.M. as all they were doing was essentially PREPAYING for circuits (under the so-called Ownership appraoch) as opposed to paying the lease each month. Anyway, it looks like Psix's grand ambition to GROW their way into profits has run into a wall --- wall called lack of profitability. Unless you are a PTT or have source of cashcow profit from another division, I don't know how ANYONE can make any money by supplying capacity (which is what Psix does for the most part notwithstanding their new initiative in Web Hosting etc.....unfortunately another heavy cash investment business). I figured Schrader's strategy was to sell out to a Carrier and find it surprising that he is STILL trying to go at it alone......the sale may still happen but now his negotiating position has been badly eroded. Still, at $2.5, this may be a good candidate for a quick flip if Psix can sell it to someone. The problem is all the major Carriers/PTT are all dying for cash (due to IP/UMTS network buildout needs) and the last thing they will do is buy a hodge-podge of network and POPS assembled by Schrader....but you never know. This one is for the gambler right now. By the way, how much cash does PSIX have and what's their burn rate? In other words, how long can they avoid Chapter 11?