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Technology Stocks : Able Telecom (ABTE) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (594)	3/6/1999 11:15:00 AM
From: david james	Read Replies (1) \| Respond to of 700

As a couple people mentioned to me, the 12% profit guaranteed on the minimum $325 million in work from Worldcom (i.e., minimum of $39 million in profit over 5 years) represents the operating margins not the net margins. According to the 10k, in 1998 the cost of revenues was 82.5% of the total. So the average profit margins before general and administrative expenses, interest etc was on average 21% (1/.825). According to the 10k, 14% of their income came from Worldcom. This implies that the operating margins outside of Worldcom are closer to 23% (but lets call it 22%). As mentioned in the Philadelphia Inquirer article that was posted, Worldcom was forced to sell MSFNT by the federal antitrust regulators. The 12% margins are indeed lower than the margins Able can get through their other projects. This is one of the reasons that Worldcom has no intention of letting Able go under – and probably one of the reasons Able got MSFNT in the first place. Lets assume that 20% of the work in 1999 comes from Worldcom (some shorts think it will be less, and that's fine). Revenues in the 4th quarter were about $103 million with $500 mill in revenues expected in 1999 (that may be higher with the new contracts just announced). $400 mill in revs with 22% margins (82% cost of revenues) is a profit of $72 mill + $100 mill with 12% margins which gives $11 mill. Overall this gives a total profit before general and administrative expenses, interest etc of $83 mill. General and administrative expenses in 1998 were $18.7 mill. I expect them to bring in some big name management so lets say this goes up to $30 mill. This still leaves the company $53 mill to deal with their finances, pay the interest etc. 40 days of the $25k/day charge comes to another $1 mill (assuming they get charged). If the company simply breaks even this year and gets their finances under control, this stock would probably triple from here. Worldcom is not going to let Able go under because they are quite unlikely to get those 12% margins elsewhere. They also own 15% or so of Able's stock. The average company in this industry is trading at a price to sales of .96 (and most appear to be losing money). For Able to trade at 450 mill market cap, even assuming 15 mill shares, the stock will need to trade at $30. If I have made some mistakes in my numbers, I would be happy to be corrected (but lets avoid attacks unsupported by at least a little data). As far as the current reason for the stock price. I suspect that one of the institutions with a significant number of shares is currently negotiating to help with Able's finances. Its probably not in their interest to see the stock move up significantly, until the deal with Able is worked out. $1.1 billion backlog, market cap under $80 mill, 3 mill shares short, the company is having no trouble getting bonding on their new contracts – and their success is backed up by MCI-Worldcom. Yep, this one is going to zero. Short every share you can find.

To: Bill Wexler who wrote (594)	3/14/1999 10:23:00 PM
From: jean1057	Read Replies (2) \| Respond to of 700

BILL WEXLER IS A FRAUD.......HE IS BEING INVESTIGATED BY DIFFERENT COMPANIES FOR FRAUDENTLY BASHING AND MISINFORMING INVESTORS .........BEWARE FOR YOUR OWN GOOD.. HE HAS BEEN CALLING VLNC A FRAUD...several times ...Members of the Board of Directors of VLNC : Carl Berg /Alan Shugart/ Roberts (MCI/ Worldcom CEO) are indirectly being accused of fraud sceam by Mr. Wexler...it has been brought to their attention...and legal action are being considered and will take place in due time...