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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (4956)	6/15/2001 8:34:10 AM
From: smolejv@gmx.net	Read Replies (1) \| Respond to of 74559

from "Wall Street's Lack of Objective Research Has Diminished Market Integrity", www.prudentbear.com David Tice Testimony... before House Committee .."to use a more recent example and to illustrate the gross misallocation of capital that has occurred over the last several years, we would like to discuss the rise and fall of Rhythms NetConnections (RTHM). Rhythms was founded in 1997 as a Competitive Local Exchange Carrier that focused on providing DSL services to business. Rhythms was started as a direct result of the Telecom Act of 1996, and Wall Street had high hopes for its success in competing against the Bell operating companies. As incredible as it sounds, the company went from being founded in 1997, to a public offering and market capitalization of almost $9 billion in 1999, to being de-listed from the NASDAQ exchange in 2001. We cannot recall another instance in the past 30 years where a company with losses of $36 million on revenues of only $500,000 was able to reach such an incredible valuation and then virtually disappear in the span of only four years. We would offer this as a textbook example of a malfunctioning capital allocation process." In 2003 we'll have a film on this subject with Macaulay Culin in a leading and Maria Bartiromo and Larry Kudlow in supporting roles. dj