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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Phil Jacobson who wrote (9524)	10/15/1998 9:32:00 AM
From: James Wright	Read Replies (2) \| Respond to of 29382

Here's a weird one. In pre-open trades, the bid for EGPR is higher than the ask by about 3/8. I guess that means there will be some panic selling, but I can't say I've ever seen this type of pattern before. Time will tell . . . -- Jim

To: Phil Jacobson who wrote (9524)	10/17/1998 10:36:00 PM
From: Sergio H	Read Replies (2) \| Respond to of 29382

Phil, I want to thank you for adding QWST into my trading portfolio. There's no better stock that I know of to trade the Nasdaq's ups and downs that gives back as high a percentage return on its volatility. I'm starting to get interested in PSIX. Recent coverage initiated by Robertson Stephens is positive. Recent coverage initiated by Fuhrman Selz means there may be a public offering in the works or something similar that could be interesting. DLJ initiated coverage over the summer. I'm curious as to your thoughts. From www.iionline.com : PSINet: The Next Tele-Communications Inc. Twenty five years ago, John Malone had a dream. In 1973 Malone started using cable lines to provide a new type of television service into U.S. homes. Aptly, they called it Cable TV. Malone's genius was that he owned the cable lines and charged the consumer and the provider to use the lines. The homeowner paid a fee to receive cable and the television production companies paid Malone a fee to send their programs over the cable lines. Malone made money on both ends. "Father of the Internet" PSINet Inc. (NASDAQ: PSIX), based in Herndon, VA, may be the next Tele-Communications Inc. (NASDAQ: TCOMA). The company's chairman and CEO is William Schrader, who is sometimes referred to as the "Father of the Internet." Schrader was the co-founder of the Cornell Theory Center back in the early 1980s where he led the development of the NFSNET Backbone Network, which connected national supercomputer centers and became the basis for today's Internet. Schrader started PSINet in 1989 with the dream of becoming the world's largest Internet Service Provider (ISP). But today the dream is even bigger. Schrader wants PSINet to be more than just an ISP. He wants to become the world's largest full-service provider of Internet-related services, offering services ranging from helping companies build Internet sites, design and development, and the housing of file servers, among other things. And I like his chances. PSINet is currently the largest independent ISP in the world with an international network of ISDN, ATM, SMDS, frame relay, and wireless/satellite systems that service more than 33,000 corporate accounts in 11 countries. PSINet's services include high-speed LAN connectivity, security, e-commerce, web hosting facilities and web design. But it is PSINet's fiber optic network that holds the most value. Following John Malone's model, PSINet is setting up an international network of dedicated high-speed circuits that will carry Internet traffic. Schrader can charge the sender and the receiver for using his network, making money on both ends. A Cash Flow Story PSINet is not profitable yet, nor will it be any time soon, due to the enormous amount of capital it takes to build a network. Just like Telecommunications Inc. and Time Warner (which is not profitable), PSINet is a cash flow story. I think the company will turn cash flow positive from operations in the third or fourth quarter of 1999. That will be a pivotal point for PSINet. Once cash flow exceeds operating costs and interest on debt, the company will become a money machine. In the meantime, PSINet has nearly $600 million in cash and short term investments that will help it acquire and lay down additional infrastructure. Based on upon a valuation model that looks at the net present value (NPV) of future cash flows, PSINet is worth about $600 million. PSINet owns over 25,000 miles of fiber optic cable, which is conservatively worth $500 million. Adding the two together, PSINet's fair value stands at about $1 billion. Its current market cap is $650 million, yet it has $600 million in cash (it also has about $650 million in debt). I think PSINet is worth twice that. The stock is currently at $12.88. When the company shows positive cash flow at the end of next year, the stock should hit $25. Tom Byrne