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Technology Stocks : (LVLT) - Level 3 Communications -- Ignore unavailable to you. Want to Upgrade?

To: dr. killjoy who wrote (509)	3/24/1998 11:50:00 AM
From: Robert Dwyer	Read Replies (2) \| Respond to of 3873

Regarding your valuation numbers, I appreciate your breakdown. When I ran the numbers I came up with a current asset value of some $35-$40 per/share based upon how you would value the computer biz and coal properties. I appreciate your input there. Obviously, at $70 per share and 147 million shares outstanding, we have a stock at 2x asset value. (For those who have quoted book values, keep in mind that book value generally employs 'cost' of assets and not current market value and are often understated) Now, I think that ahaaha or whoever he is, makes the point that many companies often trade at discounts to their NAV. Mario Gabelli has made a very nice living just buying these types of companies when big discounts occur. I can remember Gabelli pounding the table that CTEX was worth 60 plus when it struggled in the low 20's. Time Warner had asset values of 70+ when it traded in the 30's. So, companies with great properties and good management can trade for substanial discounts, sometimes, for long periods of time. That, I think, is the real issue with LVLT. They, no doubt, have crack management, a viable business plan and great strategic partners. They apparently are quite successfully recruiting a top team of employees and have a large starting base ---$3 billion cash and the CTEX spin0ffs, the PKS computer biz + the coal + some small positions in other start-ups. That is certainly more than most startups have. The question is whether the company deserves a valuation at 2x assets? Right now, the market says a resounding yes....tomorrow it may say 4x or 10x....or 1x. That is why we have a market. There is really no argument....because the market tells it all. I am not a random walker by nature and believe that close and careful analysis can apy off in the long run. I thank all those who post and provide their insights along those lines.. Finally, for disclosure purposes, I am series 7 licensed and have been long CTEX and its spin-offs for many years as I reside in Northeastern Pa. near the home of CTEX. I am also long LVLT or KIWT if you prefer for another week,. Best of Luck to all.