Tuesday, April 30, 2002

At some price there is some value in some of these companies! If you can get behind the numbers and peel away the 20-40 year depreciation schedules for outdated equipment, the flakey "swaps" that inflate revenue and the slow-thinking management styles that pervade legacy telecos, a value can be found. The need for communications isn't going away. There may always be a debate about copper, wireless, fiber, coax, cable TV, teleco, satellite, etc., but somewhere in all of the debate is a monthly number that consumers and businesses will pay for their communication needs. Once those numbers are estimated, some additional estimates of intrinsic value exist. No one is certain where the bottom is in either the slump in demand or the free fall of market caps, but value exists down here somewhere. It certainly appears that value is closer today than it has ever been! Can these companies go to $0.10 a share? Sure, but by that time they'll be sharing such doldrums with an awful lot of other industries. Telecommunications Issues Fall Sharply. Investors in the troubled telecommunications sector stepped up their pace to the exits Monday. The hardest hit were Qwest Communications and WorldCom. By Barnaby J. Feder. [New York Times: Technology] 4:43:55 PM     Comments[]

"The only viable reinsurer for truly large-scale terrorism is the U.S. Government." This sentence is from a November 9, 2001 letter to shareholders of Berkshire Hathaway. The quote is Warren Buffett's. The letter, like so much of what Warren Buffett writes, is enormously helpful in understanding the insurance and reinsurance industries. Apparently, there's hope for some action! Senate Takes Up Terrorism Insurance. Lawmakers have reached a consensus on the need to revive federal legislation that would put most of the burden of paying for a major terrorist attack on the government. By Joseph B. Treaster. [New York Times: Business] 4:32:36 PM     Comments[]

Sage has been Best Software since late last year! Sage adds up threat from Redmond. Double entry bookkeeping [The Register] 3:52:56 PM     Comments[]

Weaker demand... is so often cited in these teleco disasters, but we've not found a single (mainstream/BigPub) writer who is willing to get specific about which services are suffering from weak demand. Is long distance service? Is local service? Are entry-level broadband ISP services weak? Is the long-haul carrier business weak? What about end-to-end IP networks? Hosting? Data traffic? Most of these writers leave the impression that all forms of the communications industry are down and out. Some would have you believe that the communications industry is going away. If not some form of our existing communications industry, then what? Qwest's loss widened to $698 million as the telecom provider took a hefty write-down for its Dutch venture and continued to struggle with weaker demand. [Wall Street Journal] 10:22:07 AM     Comments[]

Can Sidgmore renew this behemoth? Under Pressure, Ebbers Quits as Chief of WorldCom. Bernard J. Ebbers, WorldCom's chief executive, resigned, bowing to a plummeting stock price and a government investigation of company support of his personal finances. By Richard Waters and Ft.com Staff. [New York Times: Business] 9:45:13 AM     Comments[]

© Copyright 2002 Steve Pilgrim.