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Technology Stocks : Startec Global Communications (STGC) -- Ignore unavailable to you. Want to Upgrade?

To: john michael winesette who wrote (8)	4/29/1998 10:49:00 AM
From: Andrew Abrams	Read Replies (1) \| Respond to of 29

For those that care....numbers were good, except not fully taxed (2% tax rate!)so they need to be discounted back. Unfortunately the company has decided to do a very large ($225 Mil ) junk bond deal to accelerate growth. This is great in the long run, but will cause EDITDA to be negative for the next 15-18 months. As they buy new switches, the Depreciation & amort will go up very steadily as the switches depreciate over 5 years. which will mean $800k per switch per year. They intend to buy 20 or so Intl switches which will (besides the huge interest expense) push the cash flow into the negative zone. I would imagine that numbers will have to come down.