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

To: KJ. Moy who wrote (13345)	8/13/2001 10:09:01 AM
From: Ally	Read Replies (1) \| Respond to of 15615

KJ, Agree with you that as a course of business GX has to buy co-location deals and leases with other companies. All capacity purchases by GX from other carriers come from GX's capital budget. Casey and Coor sounded real shocked when the Prudential analyst used the word "swap". Coor said categorically, "there is no swap". He'll be in big legal problems if GX is swapping for the sake of boosting revenue. Based on Casey's and Coor's categorial denials, I believe there are no swaps. If we read the Q1 and Q2 reports closely, we will see in both reports, GX disclosed that it was buying capacities from other carriers when doing so makes sense economically. So there is no surprise that it is purchasing from other carriers. Like you said, in the last mile and Metro rings, it would make perfect sense to collaborate with other carriers. What is a surprise that one analyst suddenly used the word swap and started another FUD ball rolling. As for the CSFB analyst recent report, I believe he is being unduly pessimistic on GX's forward sales. Other analysts, such as the DB's report which I posted here, are more optimistic. The truth is: there are two camps. One camp sees total pessimism, and the other camp sees a temporary slowdown in growth. We do need to acknowledge that the CSFB analyst made a good call in June, however, it does not necessarily mean that he is good and will continue to make prescient calls. If GX stock rises to well above $5 within next 12 months, he would have made a lousy call. I have a model of GX's business, and based on the forward assumptions that I choose to use, I can make the future as dreary or as bright. My personal take is that GX would achieve the recent guidance this fiscal year, and be back on 30% growth track next year for all the reasons that have been previously mentioned. No one knows for sure what exactly lies ahead, not even the analysts. So, each of us have to figure out our personal investing style (risk tolerance), figure out what GX's global network and business model are worth, figure out whether we can wait it out, figure out whether at $6 the stock has discounted the lowered guidance, and figure out where the stock will be in 12 months if growth continues, or not.