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Technology Stocks : Covad Communications - COVD -- Ignore unavailable to you. Want to Upgrade?

To: Patricia Meaney who wrote (2509)	11/28/2000 8:44:32 AM
From: Captain James T. Kirk	Read Replies (1) \| Respond to of 10485

LOS ANGELES, Nov 27 (Reuters) - Covad Communications Group Inc.'s (NasdaqNM:COVD - news) move to shed 13 percent of its workforce should slow the burn rate at the broadband Internet service company and delay its return to the market for new funding, analysts said on Monday. ``It's going to allow their cash to go a little further,'' said Dan Ross at Sanders Morris Harris. ``The whole point here is to push off the point at which you have to go back to the capital markets.'' Covad said Monday that it will cut 20-30 percent from costs in 2001 by cutting 400 jobs in facilities across the United States and scrapping construction of a phone-support center in Alpharetta, Georgia. Covad, which uses digital subscriber line (DSL) technology to provide high-speed Internet access over existing copper phone lines, said it will take a one-time charge in the fourth quarter to cover severance costs and related expenses from the restructuring. The company, which was forced to restate its losses for the third quarter because of deepening problems with collecting from troubled Internet service providers, will issue revised financial forecasts on Dec. 12. Until that more detailed disclosure is available, it is difficult to judge whether how much the cost cutting will extend the useful life of the near $1 billion in cash Covad has on hand, said James Henry, an analyst at Bear Stearns. ``That's the crucial question,'' he said. Given that Covad is running through about $70 million per month as it tries to expand its network, the company has the funding to run into 2002, said Sanders Morris Harris' Ross. By cutting costs by 30 percent next year, management could extend that to the second half of 2002, he said. Covad's shares have lost almost 96 percent of their value in a steady decline from a high of $66-10/32 in March, and the company has about $1.5 billion in outstanding debt, according to Moody's Investor Services. ``This was a company that grew at a time when capital was freely available, and it has all but shut itself out now from telecom service providers,'' Ross said. Despite Covad's cash crunch, analysts still praise the company's demonstrated ability to grow its network quickly and to provide market-leading support services. Covad spokesman Martha Sessums said the company is on track to achieve savings from its automated back-office support and an increasing percentage of DSL-ready phone lines, reducing the need to send service trucks to the field. The company will also start offering self-installation DSL packages for individual subscribers in the first quarter of 2001, she said. Covad shares edged higher in after-hours trade to $2-29/32 compared with $2-23/32 at the close on Nasdaq.

To: Patricia Meaney who wrote (2509)	11/29/2000 12:19:30 AM
From: John Erb	Read Replies (1) \| Respond to of 10485

>>>my extra telephone line that I used as a dedicated line when I was using a regular modem. I haven't taken it out yet thinking that maybe I might want to keep it for the future just in case extra lines are hard to come by.<<< Pardon me for butting in, but . . . You know, your ADSL line probably has a greater liklihood of being able to provide you with extra lines in the future than it would be that your extra line will be worth the monthly cost. Just a thought.