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No. of Recommendations: 3
If TyCom goes to $7 per share, it's most definitely a buy. At the very least it's a pair trade: go long TCM and short one of its weak competitors. Maybe GX. Why? Because:

TyCom has a growing cash making machine in its fiber-optic cable manufacturing and installation business. This is a safety net and guarantee against bankruptcy. This is also an integrated internal source of supply for the company's global network (the first of which will be ready for service later this year - crossing the Atlantic). No other competitor has this advantage. Global Crossing certainly has no guarantee against bankruptcy. That goes double for Williams, Level 3, 360networks, and GTS. None of these companies has any ability to reach self-sustaining operations in the near-term.

Global Crossing? They're not as rosy as the Fool's GX board members would have you think. If you look at what they said during their last earnings conference call and tried analyzing their revenue streams, you'd see that a massive amount of revenue growth came from voice: a LOW MARGIN AND SHRINKING business. Another large chunk of their business comes from IRUs. But competing head to head on IRU sales with TyCom would not be a good idea because TyCom has the low cost advantage due to its integrated manufacturing base.

So a short - long play of GX (short) and TCM (long) would be a good pairing. TCM should outperform GX over the long haul. If you look at GX's debt load and cost structure, it becomes apparent that they'll need to grow dramatically while controlling costs. This is not a company run by operationally experienced management. The CEO, Chairman, and CFO are all deal oriented:

- Gary Winnick, Chairman: came from Drexel Burnham and worked with Michael Milken in Hollywood in the Junk Bond glory days (before the indictments, of course). Is an investment banker and bond salesman by trade.

- Tom Casey, CEO: background is law. Worked for Merril Lynch as an investment banker and one of the deal makers taking GX public.

- Dan Cohrs, CFO: background is a Harvard professor and later mergers & aquisition work at GTE. Very intelligent and a good speaker. No operational experience prior to GX. Maybe learning on the job?

Just my 2 cents.
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