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Technology Stocks : International FiberCom, Inc. (NASDAQ- IFCI) -- Ignore unavailable to you. Want to Upgrade?

To: FastC6 who wrote (2223)	4/30/1999 11:51:00 PM
From: Satch77	Read Replies (2) \| Respond to of 3541

Snake, Are you still long? Satch

To: FastC6 who wrote (2223)	5/2/1999 7:30:00 PM
From: Jerome Wittamer	Respond to of 3541

Chris is right when he says don't look at earnings (whether they are accretive or not), look at future growth. Why is that? and why is IFCI priced at $6 and change while its earnings have gone up in the last year? First let me tell you never to trust earning figures; they never or rarely reflect true value creation within a company. The 'accretive vs dilutive' discussions are a nonsense. Anybody ever heard of the 'bootstrap effect'? Let's say earnings double as a result of an acquisition and the number of shares outstanding only increases by 50% (because acquirer has a higher PE). Earnings per share increase by 25% from 50c to 62.5c. Good deal? Nope! There is no real gain created by the acquisition and no increase in the firms' value. Why? The problem lies in the fact that some firms acquire companies which grow less quickly then them and thereby waste their financial resources in investments which do not increase shareholder value (i.e. negative NPV due to return lower then the required rate of return / market capitalization rate). Hopefully however, the buyer will leverage the competences he just purchased when buying the other firm and turn its slow growth into fast growth. Analyst know and see these issues. I know many of you think negatively of Wall Street in general and think you outsmart analysts by far. The truth however...might not be the one you want to hear. Another reason why IFCI's strategy is confusing is the implications of the cash and stock mix offered to the acquirees. We lack detail over the deals and therefore cannot fully appreciate whether they are good or not. As some of you have understood, the future valuation of IFCI depends more than anything else on the ability of Kealy to extract from his subsidiaries the synergies which appeal to large cable operators. These few words mean a lot... Good luck to all!, Jerome

To: FastC6 who wrote (2223)	5/3/1999 12:09:00 AM
From: Chris Helton	Read Replies (2) \| Respond to of 3541

Snake Eyes, re your assertion that IFCI will post sequentially down earnings...I don't know how you could have deduced this? That would happen only if IFCI was not able to get contracts for the companies they are acquiring. They have already demonstrated that they can get contracts for Kleven Construction and Riley Construction due to the new engineering and design capabilites carried elsewhere in the company. Admittedly, this co (IFCI) is not a series of marriages made in heaven but then again what mergers are. All Star (just acquired) is a very powerful company in its own right and is likely to get a lot of contracts in the rapidly growing West (where I reside). So I have a hard time understanding your assertion that sequential earnings will be down. Also, re your assertion that Keeley can't find qualified personnel to grow his company, the very reason for the acquisitions is to get the new personnel. It seems likely to me that despite your last posting that you were "long" @$6 1/8, that you have returned to your favorite posture, the short side. All's fair in love and war, so you have the right to whichever side you choose, but the debate would be enriched if your forecast of sequentially down earnings was backed up with an argument we all could debate rather than just a personal assertion. Re my suggesting that investor's in IFCI should not necessarily focus only on current earings (as they do with Internet stock valuations), I think the comparison was made only to point out that current eps is not all important. I should have used "cyclical" companies to make my point since you focused on the differences in revenue growth and size rather than the valuation method. A more unbiased approach might have made the connection I was seeking. Good luck Snake, you will need it on this one.