Here's an interesting post from another board which makes sense to me.....
By: AlienTech $$$$
Reply To: None Friday, 24 Aug 2001 at 7:32 AM EDT
Post # of 36462
debt-free exodus?
Lots of companies would love to buy a debt-free exodus for $6 billion or more.
$3.5 billion in debt + $4/share*600m shares = $6 billion.
Without the debt, EXDS is already cash flow positive, and it only gets better over time. With the strong backing of a telco with big pockets, EXDS will grow at a rapid rate for many years to come....revenue of at least $5/billion a year by 2005, with huge opportunities to exploit synergies with other service offerings. Any large telco with any sense should be licking their chops over the prospects of acquiring EXDS. The $6 billion could be cash, a stock swap, assumming debt, or some combination....
The whole issue is whether or not EXDS is worth more or less than $3.5 billion. I would argue it is obvious EXDS is worth quite a bit more than $3.5 billion.
This is a rare moment in history where BK histeria and undue pessimism has resulted in many great franchises being available for a fraction of their real worth. Is Williams Communications worth more than their debt of $5 billion? Absolutely. The same logic applies for Level3 communications, Global Crossing, Flag telecom. There are a few other telcos where BK is more likely, like XOXO. But mixed in with the companies that are worth less than their outstanding debt are a few gems whose stock is being given away for free at the moment.....EXDS, WCG, LVLT come to mind.
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You name it, EXDS is allready cash flow positive and still growing with more than 70% increase in sales year to year!
They gonna make it! |
