Message Font: Serif | Sans-Serif
 
No. of Recommendations: 2
This is why I'm more bullish on TyCom than Global Crossing and why I switched my investment from Global Crossing to TyCom.

Which begs the question, for me anyway, why do so many TCM and GX holders see this as some death match zero sum game? Do they believe that only one of these companies is going to be successful? Do they believe there is only enough demand to support one big winner? When TCM eventually gets a system built and starts winning customers, those customers can only come at the expense of GX? We're buying stocks here, not trying to pick the winner of horse race. And it's good to remember that in betting, the second place horse often pays more than the winner :-)

I happen to own both now. I happen to believe they are both going to be very successful in this space. Each has it's own merits or weaknesses right now, but long term, if one believes in the bandwidth story there is going to be enough business for both to be very successful.

I own TCM because I just bought it at a price I felt was fair value for the constuction business. That gives me a short term foundation while their system strategy unfolds long term. The criticism of GX's mgt lacking experience is more aptly placed on TCM, at least in the carrier space. Another reason I own TCM now is because I also own TYC and know how they manage their business. If they want TCM to be a major player they will be, it's really as simple as that. I would look for them to build TCM the same way they have their other business units. Buying TCM at 10 is a price worth waiting for the story to unfold.

But that's longer term. Shorter term GX is in the enviable position of being a next generation carrier with a system very nearly complete, giving them a considerable first mover status. Comparing GX and TCM today is really comparing apples and oranges for the next couple of years. Ultimately they may get to the same place, but they're going to look very different getting there in the short run.

I'm not going to get into a tit for tat about financials, we can disect them forever. I'll just leave it with my own bottom line that TCM has the resources to build/buy and pay for their system and grow the company want. GX has the system, the momentum, and the growing customers to pay for what they've already built and continue growing the company they want.

I've placed bets on two companies I believe are going to be major suppliers in this space. I don't believe for a minute that only one will dominate. From where I purchased them I'm guessing both will return 5 to 10 times my investment. Don't see any reason to do that once when it could be twice as nice.

RC

Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.