Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : GX Investors Thread -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (87)	8/23/2001 8:51:57 AM
From: Ally	Read Replies (1) \| Respond to of 586

Spekulatius, >>When the current in place network is fully depreciated ($11 Billion worth of depreciation) and still producing revenue will you argue that it has no value at all? << If such a scenario happens, it means management and auditors screwed up by depreciating faster than useful life. >My estimate is that at least 2B$ of capex is needed to keep it modern - if GX decided not to invest in capex, they would be hopelessly outdated in 2 years, given the technical progress in fiberoptics. < This is KEY , and it's assessment will significantly affect whether GX will have free cash flow. Remember Sheldon implying that he (or his firm) has "cracked" the secret formula... then, on a separate post, casually, he mentioned $1B. So, I would ask you, how did you arrive at your estimate of $2B?

To: Spekulatius who wrote (87)	8/23/2001 9:34:04 AM
From: BWAC	Read Replies (1) \| Respond to of 586

"here are some late comments: >> Assets are also required to be shown on the books at the lower of Cost or Market Value. << There is no market value for GX's assets. The "market value" of GX would only be know if GX decided to liquidate itself. In the absence of a market value, GX will stick to a predetermined depreciating schedule. Is it obvious how fast GX depreciates its assets? Does anybody know the answer?" Go back and read the series of posts from yesterday. It details the depreciation schedule form the 10K. Message 16243029 And this particular nugget from the 10K: "h) Impairment of Long-Lived Assets The Company periodically evaluates whether facts and circumstances have occurred that indicate the carrying amount of a long-lived asset may be impaired. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset's carrying amount to determine if a write-down to market value or discounted cash flow is required. " ------------------------------------- ">> When the current in place network is fully depreciated ($11 Billion worth of depreciation) and still producing revenue will you argue that it has no value at all? << GX network will never be fully depreciates, because GX has to buy new equipment to keep its network up to snuff. How much does it cost to keep GX network state of the art?" EMPHASIS was on CURRENT IN PLACE network. Said nothing about additional improvements, etc. Which I agree are necessary and appear to be around $2 Billion per year.