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Author: Thon1 One star, 50 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 512  
Subject: talk future Date: 12/30/2005 3:20 PM
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Does anyone have any idea why this stock won't budge? P/E is great, not much debt, solid management. Should be a winner.
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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 500 of 512
Subject: Re: talk future Date: 1/2/2006 11:21 PM
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Does anyone have any idea why this stock won't budge?

Regulatory uncertainty. This was an original Hidden Gem pick because of the expectation that FCC rules would ensure TALK would be able to maintain a position in the local phone service market and not be squeezed out by the Baby Bells. This did not happen. While VoIP and cable internet phone service has continued its slow penetration, TALK has been forced to accept higher rates for access to the Bell networks to remarket service to customers. This has cut the discount margin they can offer, which subsequently reduces the incentive to switch to TALK.

That said, TALK is trying to build their own networks to eliminate the dependence on the Bell networks all together, but this is a slow and costly investment. You should pay close attention to how this is going in the quarterly conference calls as the future of the company depends on its ability to establish its own infrastructure and thus be able to offer services to customers at substantial discount to the regional monopolies. Note that Hidden Gems did not wait for this uncertain outcome, and sold its position long ago.

Fuskie
Who believes that the opportunity to offer both high speed DSL and voice services over its own networks could make or break this company...

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Author: Thon1 One star, 50 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 501 of 512
Subject: Re: talk future Date: 1/5/2006 9:57 AM
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I know all this, but the low p/e would suggest that Talk is making money in spite of the ruling. No?

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 502 of 512
Subject: Re: talk future Date: 1/5/2006 11:56 AM
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I know all this, but the low p/e would suggest that Talk is making money in spite of the ruling. No?

It is not so much about now but about tomorrow.

Fuskie
Who notes that churn rates have sometimes been higher than desired as well...

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