EXAMPLE OF COMPANY EXECUTIVE VP OF PSIX POSTING ON YAHOO:
Dear Ultimateinvestor and Other Shareholders,
I am spurred by Ultimateinvestor's energy to post some thoughts of my own. Remember that, like you, I am seriously interested in the performance of PSINet shares. In fact, I am devoting my career to improving that performance.
I wish I had more insight into the background of some of you. Unfortunately, there is rarely any information available behind your pseudonyms. So, I'm a little bit at a loss as to the motivation or other driving forces behind your comments. But, let's start with some basics.
First, as to insiders and what we can say or do. At almost every moment in time, I and other insiders in the company possess material inside information which prevents us from buying or selling PSINet shares, and about which we cannot talk. In a business such as ours, which is moving extremely fast, the mere presence of deals (which may or may not be consummated) prevents action on our part. This is as it should be. But, you cannot take from our lack of buying shares, for example, any lack of support for the company. If you could witness the complete dedication of nearly every person in our company, you would understand better.
Second, as to coverage by Merrill Lynch or anyone else: This is not something that is in the control of the management of this company. Many people commented for months on the lack of coverage by a large house such as DLJ. Well, they provided an analyst to cover us, and the result was more than gratifying. We are, as I have mentioned in other posts, in an unusual spot. We are not in the same market as regional ISPs, and we are not owned by a Telco, as is UUNET. What happened to the others in our industry with whom we used to be compared? Gone. Netcom, BBN, UUNET, Digex, you name it. Try to find information on them of any independent sort. Now, we're in a space between regional ISPs and Telcos. Hard to cover, though some do it. But, if ML doesn't cover this space, that is something that is part of their market focus. So, I can share your sentiment, but can't make it happen.
Now for the arrogance thing. This is a bit like the old saw about whether you've stopped beating your wife. We believe strongly in this industry, this company, and the people in it. Every one of them. We had one proposal to consider selling this company for $10 a share in January, and did not take the offeror up on it. Far as I can tell, most of you have agreed with what we did. I sincerely hope that doesn't count as arrogance. Then, there are media pieces on Bill Schrader which focus on his vision and his intensity. Translate into arrogance if you want, but many who know him would disagree.
I've previously answered the one about whether the board of this public company would let a founder do things that go against their fiduciary duty. I hope that won't appear again. It is an open, unfounded shot at a group of people that you should get to know better before you come to any such judgment.
As for a couple of other things: The company, which some thought could not raise enough capital to compete with the big boys, went out and financed $630,000,000 between November and April. Got over $240,000,000 in OC48 fiber. Has dark fiber between NY and DC, and fiber across both the Atlantic and the Pacific. Are we in debt? Of course. Are we trending in the right direction with EBITDA and other measures of financial success? You bet. Perhaps we could engage in discussion of the financial reports of the company as an aid to defining any issue here.
This has been a long post. Sorry, but some response was called for. I'd be happy to talk about particular, factual issues wherever possible, with your understanding of the constraints posted above.
Sincerely,
David Kunkel
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