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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (36050)	9/25/2001 1:54:33 PM
From: Jim Spitz	Read Replies (1) \| Respond to of 37746

I broke down and bought some MCLD in my long term account.

To: Softechie who wrote (36050)	9/25/2001 2:05:50 PM
From: Wes Stevens	Read Replies (1) \| Respond to of 37746

Ok, Just looked at their 10k filed last month. Long term debt is $3.5 b. But they have another $650 in liabilities. They have $120m in cash. They list $400m in "trade receivables" and $84 million in defered and prepaid expenses. They had a operating loss of $275m for the first 6 month of the year. Add to that $114m in interest payments. They took in $100m last month from the private placement of 36m shares of stock. Unless you think that the "trade receivables" are really going to magically convert into cash, they are just about out of money about right now. This from the 10K: We announced on August 1, 2001, that investment funds controlled by Forstmann Little & Co. ("Forstmann Little") agreed to invest $100 million in the Company to provide additional funding. In exchange for the investment, the Company will issue 36.4 million shares of the Company's Class A common stock. Forstmann Little has also agreed to exchange the convertible preferred stock it acquired in 1999 for convertible preferred stock that has no dividend. The conversion price of the Forstmann Little preferred stock will be reduced from the current conversion price of $12.17 per share to $6.10. The transaction is subject to customary closing conditions and is expected to be completed by the end of the third quarter. Once closed, Forstmann Little's investment in the Company will increase to $1.1 billion, representing a fully diluted ownership interest in the Company of approximately 20%. As of August 3, 2001 based on our business plan, capital requirements and growth projections as of that date, we estimate that we will require approximately $700 million from July, 2001 through 2002 to fund our planned capital expenditures. Our estimated aggregate capital requirements include the projected costs of: . expanding our fiber optic communications network, including national and intra-city fiber optic networks . adding voice and data switches . constructing, acquiring, developing or improving telecommunications assets in existing and new markets 16 We expect to meet these funding needs through various sources, including existing cash balances, the existing McLeodUSA lines of credit, prospective sales of selected assets and cash flow from future operations.