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: Bonzo who wrote (535)	2/13/2002 9:25:15 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 586

Bonzo I can't comment on those things you mentioned because I don't know anything about them. Since creditors are getting only 4c in the dollar right now, that doesn't leave a lot of room for shareholders to get much, even if there is some case for them to get anything at all. If Global Crossing is anything like Globalstar, which I know a lot more about, it will have been an appalling chain of bad management and marketing leading to a dead end when it need not have been the case at all. I suspect it could have been a great business but they tried to gold plate each megabyte and sell it at a premium. When there are petabytes to sell and cyberspace to fill, there's no point in trying to hang onto 1990 fibre data transfer prices. Stack it high and sell it cheaply. Mqurice

To: Bonzo who wrote (535)	2/13/2002 11:17:07 PM
From: devonian	Read Replies (3) \| Respond to of 586

As an unfortunate bondholder, I can tell you I would take some kind of compelling argument to convince me that shareholders should maintain some significant participation if bondholders retained under 90% of the residual value after a restructuring. I truly sympathize with equity holders (I was one, but switched to a supposedly "higher" level of safety), but a deal's a deal. Debt has to get paid first. Setting any other precedent for short term convenience would be severely detrimental to all corporations and shareholders. Without debt financing, most shareholders wouldn't get the higher long term returns they do. With respect to the current proposal, if all current debt and bondholders did a debt for equity swap and eliminated virtually all existing debt, with the cash on hand and possible asset sales, this becomes a much more viable company. It could probably even then go out and raise some reasonable amount of new (secured) debt for additional working capital. I'm certain I'd come out ahead of the 4 cents bond value currently assigned by the debt market, and, I'm willing to bet, still substantially better than the current Asian proposal. Now, if it took some smoothing over with the current equity holders to get something done quickly, fine... take a tiny piece for long term upside for your near term cooperation. It's a fair trade for getting the show on the road quickly and begin the rehab process. In a year and a half, Tycom's got a competing network and we REALLY don't want to argue the point until then. I hope we all come out ok, but having high hopes about getting a more secure position than you implicitly agreed to(by buying equity) is probably not warranted as things are looking now.