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Technology Stocks : PSIX up 26.5%, Takeover(?) -- Ignore unavailable to you. Want to Upgrade?

To: Deanne who wrote (1745)	1/6/1998 5:27:00 PM
From: blankmind	Read Replies (2) \| Respond to of 5650

sorry to hear you are in the red on this stock. but... 1. the ebitda - with the expansion plans and the necessary debt needed to fund these projects - a. internet telephony in early 1988 b. more fiber beyond ixc (100 million) c. 20 high-speed modem access centers - 90 million d. network upgrade - 120 million positive ebitda does not appear to be on the horizon (1999 according to psix). i do not think this is terrible, if they can pull off there abitious revenue growth plans of 100% per year, this will prove to more of a factor. 2. the price - a. we have known in the past of potential suitors for psix. but the price appears to be the sticking point. b. "This stock needs to be worth $24 per share in three to four years, or PSI will have to give up [an additional] 25 percent of the company to IXC" - this assumes the price stays around 6. we all know the price is headed for 2, so they will actually have to give to ixc 80% of the company and create massive shareholder dilution. c. mgmt sees their plan bringing this stock to 24 or better in the next few years with their aggressive expansion plans. they have backed up their belief of 24 or more with the ixc deal. by the summer/fall we should see rapid growth in revenues if the expansion is working. d. just kidding on the stock headed to 2. i am bullish on psix and am hoping they can pull off this ambitious plan, if they can this stock will soar. 3. mgmt - can this mgmt pull this expansion off? i hope they begun to recruit from the outside. psix has not grown as fast as other isp's, and a sellout long ago would have been worthwhile. but at the current price, i agree psix should not sell. from the looks of it psix is waiting for $24 minium per share, so we can forget a buyout for a long time.