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

To: Sir Francis Drake who wrote (13034)	8/2/2001 12:38:38 PM
From: HW Bowman	Read Replies (1) \| Respond to of 15615

Sir Francis, (1) Good point in observing that total capitalization is less than total debt. But that only collapses if there is a violation of financial covenants in the financing documents. It does not mean automatic financial collapse at all. Otherwise, every company would be subject to loan default if its stock price fell below a certain level, which is generally and pragmatically not the case. (2) This business about the possibly fraudulent nature of swaps between LVLT and GX. Where is this from? I haven't heard anything about that. Such fantasy swaps are known to occur, but usually in situations involving swaps between wholly-owned subsidiaries playing financial games. LVLT and GX are at arm's length, and the swaps certainly have a prudent business purpose in the diversification of routes, eg. the Yellow thing in the Atlantic a while back. Why not swap fibers on two different cables so both parties are protected if one cable goes down? It is not merely a financial transaction in such case.