Through TheFLY's Eyes: Global Crossing

from Theflyonthewall.com





Looks Like The Turnaround Is Getting Traction

Yesterday, Global Crossing UK (GCUK) reported good results. Global Crossing UK is majority owned by Global Crossing LTD (GLBC), which was one of the poster child stocks of the tech-telecom bubble.

Global Crossing filed bankruptcy earlier in the decade and has emerged with little debt on its balance sheet. When buying Global Crossing stock you get two companies - the undersea fiber cable assets which is mostly owned by Global Crossing LTD and the UK and European focused business which trades under Global Crossing UK.

Global Crossing UK reported solid results yesterday. While revenue was essentially flat from the previous quarter, the quality of revenue is improving. Management indicated that demand for services is picking up and that it is working with other more pure IP-based providers to sell services, indicating a healthy operating environment is emerging.

Global Crossing LTD also reported a solid quarter during the summer. GLBC has rallied nicely during the past month, however, got hit good yesterday in the market's sell off. It cost Global Crossing LTD $5 to $6 billion to complete its network. Today, you can buy the stock of Global Crossing LTD and get all those global assets and the UK business for less than $1.0 billion just as the supply and demand for fiber bandwidth gets tighter and tighter.

All the hype from the bubble era about demand for bandwidth is proving true, yet few want to invest in it. This is your chance to get a good company for a cheap valuation in a higher growth industry.