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

To: BWAC who wrote (13274)	8/9/2001 4:32:29 PM
From: changedmyname	Read Replies (1) \| Respond to of 15615

Not that I believe him, but it is interesting to note that CSFB started the talk of GX numbers coming down, and everyone here (including myself) laughed at him. Few weeks later GX implodes with a dismal outlook. Do we laugh at him a second time? Jason

To: BWAC who wrote (13274)	8/9/2001 6:47:42 PM
From: Selectric II	Respond to of 15615

Unbelievable, aren't they? Why have the target price a buck lower than it is today, with a "hold" rating? With that target, shouldn't they put a "sell short" rating on it for a 20% gain?

To: BWAC who wrote (13274)	8/9/2001 7:39:41 PM
From: Ally	Read Replies (3) \| Respond to of 15615

BWAC... easy now, the analyst may be very negative in his forward assumptions, not neccessarily stupid :-) It's our money to worry about, and whether we should still buy and hold, steadfast in our belief in this company. However, I do think his $5 target is ridiculous.... start ups with a fraction of GX's assets are selling for more. Maybe he knows Winnick will NEVER hand his firm investment banking business, so all bombs away, hoping the wind blows in the right direction and he hits home run. Another question for you: If GAAP is so definitive, and auditors are so steadfast, how is it each time a new CEO comes on board, he/she ships truckloads of inventory, goodwill, and other balance sheet items to the junk yard for write-off, the same "junk" that had propped earnings in prior years, reviewed and signed by auditors?

To: BWAC who wrote (13274)	8/12/2001 6:21:35 AM
From: DukeCrow	Read Replies (2) \| Respond to of 15615

<< 1.) "$5 target price." Hell thats only 50% of the $11 Billion in tangible property plant and equipment that make up the network. >> You seem to be forgetting to take GX's debt into account. They couldn't have built the network without it. << 3.)"cut 2,000 jobs, or 15 percent of its work force." Yeah as in eliminated, not needed, due to the current slower buildout phase GX is entering. >> Which is exactly what CSFB said in their report: Operational Streamlining: Global Crossing also announced plans to streamline its business through the consolidation of certain offices, facilities and functions resulting in the elimination of 2,000 positions. This integration is a result of regional organizations that resulted from Global Crossing's history of acquisitions, now being integrated into a central unit. This action is expected to reduce annualized expenses by $160-170M and save an estimated $70M in 2001. GX expects to take a non-recurring charge of approximately $250-325M upon closing of these facilities (expected in 3Q) with $50-75M relating to staff reductions and $200-250M relating to the closing of certain facilities. <<4.)"reflected "low-quality" revenues " Damn crappy MSFT, Dept of Defense, Embassies, DirectTV, NATO, etc.>> You seem to be jumping the gun here. Most of those contracts had no bearing and weren't even announced in Q2. It is true that GX used "low-quality" revenues to post the Q2 numbers they did. Low-quality meaning that 21% of their cash revenues and 73% of their adjusted EBITDA in Q2 were through capacity swaps. Of course, that is down from 23% and 85% in Q1. However, GX made no mention of capacity swaps in Q1 or Q2 of Y2K, so this could end up being a troubling sign. The probelm with swaps is that no one can be sure that they are being properly valued at market prices. It reminds me of the ad swapping going on between B2C Internet companies in 1999 and 2000. Also, recurring revenues from data services came in substantially below expectations (close to 30% below) with only 3% sequential growth. That is supposed to be what differentiates GX from the other nextgen carriers, and if those revenues don't start coming in according to plan then that makes GX no better than the others (besides the fact that their network is global and virtually complete). << 5.)"funding gap of about $80 million in 2003" Sell a frigging airplane or boat or something to raise that. Don't the BOD members carry around that much as pocket change anyway? >> That $80 million is really not material, as you say. It is just a function of CSFB's financial model. However, you fail to mention the funding gap of almost $400 million in 2004 which CSFB projects. That is a little more material to GX. Of course, I'm sure GX could scrounge up $400 million through some creative financings. Whether or not CSFB will ultimately be proven right, I agree with Jason and feel that their comments should at least be thoughtfully considered. Their projections may turn out to be a worse case scenario, but investors would be wise to at least ponder them -- even if they are later dismissed.