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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (11308)	11/25/2001 12:11:11 AM
From: Raymond Duray	Read Replies (1) \| Respond to of 74559

Hi Jay, Wow. I thought I'd get a couple of sentences and instead got a treasury of intelligent views. Sorry to hear that the first tranche went so badly. I've a friend who suffered much the same in LVLT bonds. The yields at 70 looked quite compelling. Enough to entice my friend, while I was content to be an observer. I'm not quite sure any more of my information on GX, having traded it successfully in 1999. At the onset of my speculation, I was known to suggest on the SI-GBLX thread and in private correspondences that I didn't trust management, i.e. Winnick any farther than I could shot put him. And I furthermore saw a tremendous overhang of CIBC vesting rights that seemed to put an impenetrable lid on the equity. My sentiments about the basic integrity of management remain consistent. It is my opinion that the insiders haven't the least bit of concern for the investing public, whether in equity, converts or bonds. The whole idea has been to convert the public's money into the insiders gain. This has been a magnificent success, today's low share and bond prices notwithstanding. I'm in awe at how well Winnick has managed to pick so many pockets. That said, I believe it might behoove a speculator in GX securities to keep an eye on where the shell game has moved to, which is Winnick's private investment company that last summer was engaged in some quite fancy footwork regarding put transactions on GX stock. Yes, the GX shareholder got pummelled, but the investment company did just great! As far as GX as an ongoing company, I believe that the tariffs, IRUs and other pro forma and fantasy accounting means used to report income will find fewer and fewer true believers as we proceed through the industry's consolidation. With so much plant available from so many bankrupt and near bankrupt carriers, there's going to a continuing temptation on the part of GX's customers to amend the terms of their contracts. This should reach a crescendo by about mid-2003, as even the strongest of the CLECs and independent carriers succumb to cash flow collapses. From what I can see today, only "club members", i.e. the ILECs and PTTs, and not even all of them, will be left standing. I'm trying to scour my mind for likely suitors for GX's assets. DT, VZ, SBC and perhaps WCOM come to mind as the most likely public suitors. And it wouldn't surprise me in the least if Prometheus or Carlyle came into the picture. I doubt that GX can remain a free-standing entity simply because there is no key player in GX's management who's ego depends on it. The revolving door at the CEO position indicates a basic instability to the structure. The departure of many other key executives leaves me wondering if GX isn't simply a house of cards waiting for a few more bad quarterly reports before the ENE effect starts its inexorable and unstoppable denouement. Just some musings. Hope they've been of some interest. Regards, Ray