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

To: changedmyname who wrote (11937)	6/18/2001 2:14:13 PM
From: Sir Francis Drake	Read Replies (2) \| Respond to of 15615

Sure, but on the other hand, nobody wonders if Q is fully funded, the way some do wonder (however wrongly) about GX. That "security" is worth paying a premium for many, hence Q has a p/e higher than TCM for example or GX for that matter. Be that as it may, Q just broke their 52 week low. Welcome to the club - GX has been doing it for awhile, and is well practiced :) At this point, it really doesn't matter how low GX falls, from my point of view, it is worth buying, the lower the better. I wouldn't buy it over $10, but here in the $7's... yes, the cheap get cheaper, but look at it this way, there's only $7 to $0, LOL! No sweat. Q has a lot further to fall than GX, hence, I don't mind buying GX at these prices. At some point, the selling has to stop. Then the hard part starts, getting the price up, LOL! It is one thing to buy at a "low" price - many are willing. But quite another getting stuck with that "low" price for a long time, I'm afraid not many are prepared for that! Morgan

To: changedmyname who wrote (11937)	6/19/2001 12:50:42 PM
From: changedmyname	Read Replies (1) \| Respond to of 15615

Not sure if already posted, but here are views from Mer yesterday: Morning Notes Summary – 18 June 2001 2 Global Crossing (GX; $9.55; D-1-1-9) Dec00A d$2.69; 01E d$3.11 (Intra-Day Bulletin ran 6/15/01) Financial Outlook Strong, Reiterate Buy Rating We have fielded several questions today regarding the funding outlook, ILEC sale and revenue mix at Global Crossing. We retain our confidence that Global Crossing is fully funded. We predict the company will reach positive free cash flow for 2003E with around $1B of liquidity to spare. We also believe that industry trends from purchasing bandwidth on shorter term leases (vs. long term IRUs) will not materially affect Global Crossing. In fact, as argued in our 1Q review published May 25th, we believe that for fully funded carriers, the shift towards shorter term leases is positive for several reasons. First, shorter term leases are worth more in terms of both gross revenue per unit and NPV. Relative to IRU prices, short term pricing premiums are high and payback periods are short. For example, total payments received over a three to four year lease will be roughly equal to the cost of a 15 year IRU. Since the capacity can then be resold (several times over 15 years), the present value of total cash inflows is greater (repeat sales are worth more than the time value of money in those first few years). In this respect, the IRU is really just a financing vehicle. Second, short term leases don't have materially negative near term cash flow impact as some have erroneously argued. Although short term leases bring in less cash up front than IRU sales, lease contracts from carrier customers can still be monetized by borrowing against the future receivables, if necessary. Third, we believe Global Crossing's core international carrier customers still want long term IRU deals. While certain types of bandwidth customers want shorter term deals, we believe this trend is less pronounced among Global Crossing's core international carrier customers (ie, Deutsch Telekom), which generally face less short term capital constraints and greater need to lock in very long term capacity than web centric start ups. Also they are happy to secure capacity as an asset since it takes an expenses item out of EBITDA and places it in the depreciation line of their P&Ls. On the near term funding front we note that the sale of Frontier ILEC to Citizens Utilities is on track. On May 25th, the Minnesota Public Utilities Commission approved the $3.5B sale, which we believe will close by end-June. In its latest prospectus, Citizens stated the same expectation as to timing and price. We expect Global Crossing to net around $2B of cash (net of tax and repayment of an outstanding bridge loan) from the sale. Note that the move by competitor 360networks to miss an interest payment today is an important positive for long term players in the subsea bandwidth space - we highlight Global Crossing and TyCom as beneficiaries of the reduced competitive intensity likely to result from the heightened financial woes at this company. We see Global Crossing as a potential buyer of selected pieces of 360networks were the company to be broken up - for example its Atlantic cable to add capacity/redundancy and 360americas to provide more POPs and greater diversity in routes back to the US - but think it very unlikely Global Crossing would have an interest in the whole company. Our rating remains Buy for both the intermediate and long terms. (A.Quinton/ C. Irvine/ J. Moynihan/ E. Sheridan)