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Technology Stocks : XO Communications (XOXO) -- Ignore unavailable to you. Want to Upgrade?

To: Sunny Jim who wrote (819)	11/30/2001 3:24:05 PM
From: Ashley800	Respond to of 1018

No way McCaw is taking it in the shorts. He's in on it you can count on that.. TELECOM REPORT XO Communications investors take hit Commentary: Presence of big investors is no guarantee By Jeffry Bartash, CBS.MarketWatch.com Last Update: 2:42 PM ET Nov. 29, 2001 WASHINGTON (CBS.MW) -- Just because the "smart money" bets big on a company doesn't mean it's a smart move for retail investors to gamble, too. That's the hard lesson delivered Thursday to many shareholders of XO Communications, the well-heeled independent phone carrier that once captivated Wall Street's attention. On Thursday, the heavily indebted XO said it secured $800 million in badly needed cash, but the new financing deal effectively wipes out the equity value owned by common shareholders. On Thursday, XO (XOXO: news, chart, profile) shares ceased trading at $1.03 -- a pittance of their all-time high of $66. Under the agreement, venture capital firm Forstmann Little & Co. and Telefonos de Mexico (TMX: news, chart, profile) agreed to put up $400 million each in new financing. In return, XO will cancel out its existing stock and issue new shares. See terms of deal. Forstmann Little and Telmex, the largest phone company in Mexico, will obtain 39 percent stakes in XO once new stock is distributed. The remaining 21 percent will go to XO employees and owners of the company's senior notes, XO said. The position of founder Craig McCaw, the billionaire wireless pioneer who controls a majority of voting shares, is unclear, but the deal is probably favorable to him as well. Allies of McCaw and Forstmann Little, a long-time financial backer of XO, pack the board of directors. XO officials could not be reach for comment. Common shareholders, however, are plumb out of luck.