Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: TechMkt who wrote (11355)	5/18/2001 11:25:59 AM
From: jopawa	Respond to of 15615

James J. Cramer Goodbye to the Stress Index By James J. Cramer 5/18/01 11:14 AM ET URL: thestreet.com With this note, I am saying goodbye to the Stress Index. This was an index of telco companies that I thought might get bailed out if the Fed eased aggressively. Amazingly, the Fed eased much more aggressively than anyone thought, and it simply didn't matter. We benchmarked this Index at 100 the day the Fed changed bias (Dec. 19, 2000). We figured that XO Communications(XOXO:Nasdaq), 360networks(TSIX:Nasdaq), RCN(RCNC:Nasdaq), Teligent(TGNT:Nasdaq), Winstar and McLeodUSA (MCLD:Nasdaq) would be able to refinance with the Fed being so aggressive and get the money they needed. Now the Index is at $20. It dropped from $100 to $20 in less than six months. I figure the Index probably goes to zero, but the point has been made: The Fed's easy money is not bailing out those with bad business models. There is very little moral hazard to this series of eases. Stress Index MOST RECENT INDEX VALUE COMMENT 5/18/2001 8:38 21.75 16-May-01 21.07 15-May-01 20.69 New Low! 14-May-01 20.76 11-May-01 21.97 SIGNIFICANT DATES 15-May-01 20.69 Fed eases 50b; 4.0% (and New Low!) 18-Apr-01 27.74 Fed eases 50 basis; 4.5% Fed eases 50 basis; 4.5% 49.00 Fed eases 50 basis; 5.0% 31-Jan-01 125.29 Fed eases 50 basis; 5.5% 4-Jan-01 112.72 Fed surprise ease 50 basis; 6.0% 19-Dec-00 100.00 Fed changes Bias NOTE: WCII --> Delisted from NASDAQ April 26 TGNT --> Trading Halted CHART: Stress Index From Fed Bias Change Dec 19 '00 What would I do if I were still long the surviving companies? (I don't regard 360networks as a survivor, with its bonds at 6 cents on the dollar.) I have a suggestion. You obviously have massive losses. All of these companies have bonds that allow you to participate in anything good that happens at these companies. If you really believe in any of them, you want to sell the common stock and buy one of these pieces of paper. If you don't know how to do this, that's why you need a broker periodically. It is important to get that tax loss and, if you still believe, have a shot at participating if anything good that happens. I am telling you, in no uncertain terms, the common stock is the wrong vehicle to play in every one of these cases. The fixed income alternatives are much better. Make that change out of the loser stocks into the bonds, where at least you have a shot. You won't regret it. -------------------------------------------------------------------------------- James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to jjcletters@thestreet.com. --------------------------------------------------------------------------------

To: TechMkt who wrote (11355)	5/21/2001 9:51:09 AM
From: Ally	Respond to of 15615

Fez, >Item 3 to be voted on at the shareholders meeting is whether or not to increase the option/stock incentive plan for executives. After thinking this over, I believe voting yes is OK because it puts the executives in the same boat as us.< As a matter of principle, I always vote against proposal to increase a company's stock options plan. I think management's argument that increasing the plan will put executives aligned to shareholders' interests is just BUNK! The truth is: executives always ask for more options because of PURE GREED! There are already tons of existing stock options in place, and those should be sufficient to align management to shareholders' interest. And what exactly does "aligning to shareholders' interest" entails. Management are already well compensated with high basic salaries, plus year end bonuses. Without being handed handsome chunks of options yearly, does that mean they won't be motivated to work hard? That, they'll work to sabotage shareholders interests? When we think carefully about why management always want to increase stock options, the conclusion is clear: their intention is contrary to shareholders interest! Their intention is simply to grab away shareholders wealth. Their intention is to get their hands in the cookie jar as often and as much as shareholders allow them to. That's the name of the game. The myth of stock option plans is that options are to thwart employees from leaving the company.... that options maintain key employees. The truth about options is that very few common employees get them, other than the same few goons, again and again. It is the case of the rich gets filty rich. Very few options are awarded to the common employees, some of whom are the real treasures to the organisations. Instead, options are handed to the same people... directors, chairman, CEO, vice-presidents etc. For example, Winnick already has tons of options plus 90 million of shares acquired for pittance from his personal coffers. Does he need 1 or 2 more million of options every year so that he could be motivated to work for the interests of shareholders. I would say that if this intention of doing what's best for shareholders is not already in his heart, no amount of additional options would change his belief system. Does options truly motivate key employees to stay longer? How long did Annunziata stayed after being awarded 7.5 million options? Feb 1999 to March 2000 !! Not bad for a year's work! And so on and on. So, I do my little bit. Every time I'm asked to vote as a common shareholder to increase the stock option plan, I vote NO!