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Technology Stocks : Covad Communications - COVD -- Ignore unavailable to you. Want to Upgrade?

To: rjk01 who wrote (10453)	5/7/2007 11:34:03 AM
From: rjk01	Respond to of 10485

"We'll do more new business this year than in the company's first five years" That is growth. NEW YORK, May 07, 2007 (BUSINESS WIRE) -- M5 Networks, the market leader in delivering phone system functionality as a service, today announced the launch of a new message. Central to the message is the progress M5 has made recently against traditional premises-based phone system providers such as Avaya (AV : avaya inc com and Nortel (NT : nortel networks corp new com new ) as well as basic hosted IP telephony providers like Covad (DVW : covad communications group i com . "We'll do more new business this year than in the company's first five years," said CEO Dan Hoffman. "In five to ten years, no mid-size business will own a phone system."

To: rjk01 who wrote (10453)	5/7/2007 12:04:46 PM
From: Andre Williamson	Read Replies (2) \| Respond to of 10485

There is no reason for the price to go higher. And no reason why it won't. The fact that the price is not $1.50 does not mean it won't go back there. In fact the chart shows it goes there over and over and over. Do you believe that the vast "weighing machine" of Covad's shareholders has declared the company is only worth $0.90? That's just the current trading price. A year ago, sales were (a smidge) smaller, less diversified, more wholesale, lower arpu, and yet the stock price was over $2. Was the company really over twice as valuable then? This is NOT a fast-growth company, and wanting it won't make it so. The company has a cost-cutting mindset which is directly at odds with aggressive growth. IMO by valuation, the price is sorely undervalued, by at least a factor of 2-2.5. This is based largely on the value of the network and the options it provides. Companies in this situation don't usually trade on valuation, however, because there are more important immediate considerations that wash out most valuation issues, and/or there are no events on the horizon that will unlock that value. Valuing the company based on its ability to generate cash and profits? On that basis Covad has a long way to go to justify a higher share price. This belief formed my basis that our $2 price from last year might not stick ....why should it? Until COVD gets some real traction and starts improving the GAAP bottom line by $3-$5m per quarter, my best guess is that the share price will continue to bounce around all over the place, from $0.50 to $3. It doesn't take much to shove it around. Andre