LVLT - Level 3

[Guest ValueCarl]

txlaw,

 

I am not sure that I agree with you here. Infrastructure as a Service(IaaS) is at the core of what LVLT offers its customers who provide services to their customers from data centers. The fact that Amazon may compete with other LVLT customers in the "CLOUD" is good for buyers and sellers of services as they differentiate product sets and features in order to advance the customer experience. It's exactly what "The Invisible Hand" might expect. 

 

 

<I also get that by partnering specifically with an Amazon or another IaaS vendor, LVLT might keep itself from winning business from other customers, whether or not they are in the same line of business as AMZN.>

 

I think your two key questions, one specific to the Amazon account, and one looking for an earnest bid remains vivid,  however. 

 

 

Brker_guy, if you would be so kind, would you please explain-technically speaking-to the board how the exhaustion of IPv4 addresses now rearing its head, while dovetailing with the advent of IPv6 addresses fits into the VIDEO and/or traditional t.v. scheme of things? thx.

 

What about all those companies with millions of extra IPv4 addresses?

Some that got IPv4 addresses for free, including Stanford, BBN, Interop, and the Defense Department, have voluntarily returned IP addresses they don't need. But there are lot more organizations that arguably don't, and it's up to them to decide what to do. Among those with a /8's worth of IPv4 addresses are the U.S. Postal Service, airline operations support company SITA, Prudential Securities, pharmaceutical giants Merck and Eli Lilly, the Massachusetts Institute of Technology, IBM, Apple, Xerox, AT&T, Level 3 Communications, General Electric, Ford Motor, and Halliburton.

 

Read more: http://news.cnet.com/8301-30685_3-20030482-264.html#ixzz1D0PHLv5V

 

http://www.level3.com/downloads/IPv6_Brochure.pdf

[ubuy2wron]

Carl, I have read every post and I have come to the conclusion that the only rational approach is to just buy some LEVEL 3 bonds that are paying a decent yield and wait for the top line revenues to show some signs of life. Moores law type industries are a tough environment to run a business and it just appears that this is what you are up against. Collect you double digit return on the bonds and focus your efforts on finding out who is creating the IP that is allowing more and more data to be sent over the same fibre. This co is running as fast as they can  just to stay in the same place

[txlaw]

txlaw,

 

I am not sure that I agree with you here. Infrastructure as a Service(IaaS) is at the core of what LVLT offers its customers who provide services to their customers from data centers. The fact that Amazon may compete with other LVLT customers in the "CLOUD" is good for buyers and sellers of services as they differentiate product sets and features in order to advance the customer experience. It's exactly what "The Invisible Hand" might expect.   

 

ValueCarl, I think we might be talking past each other here because you seem to be arguing that it is better for society if LVLT does not become part of a vertically integrated IaaS cloud computing company.  I do not disagree with that sentiment.  

 

The way I see it is that LVLT has a growing market to sell communication services to IaaS providers such as Amazon, PaaS providers such as Google and Microsoft, and businesses that want to own their own data/computing facilities.  When I say IaaS providers, I'm talking primarily about utility computing providers rather than communication service providers.  This huge market makes LVLT very attractive to me as a business.  

 

However, I also think that an opportunistic acquiror could emerge because of LVLT's debt burden and low stock price and try to buy the company.  Whether such an acquiror would be successful is another question.  I'm somewhat ambivalent towards accepting an offer and holding for the long run, mostly because the debt holders (including HWIC) are milking LVLT for all its worth, causing pain for equity holders and restraining LVLT's growth.  In fact, there's somewhat of a conflict of interest here on the part of the entities who are both large equity and large debt holders.

 

Amazon seems like a potential candidate to acquire a LVLT because their goal appears to become the lowest cost IaaS provider.  They could definitely undercut other IaaS providers by owning part of the network.  And they would boost their CDN offering.

 

Google owns fiber, right?  They also own utility computing facilities.  They also provide an application platform, Google App Engine, which hasn't gained much traction yet.  The fact that Google owns it own data centers, as well as some fiber, could allow Google to become the lowest cost PaaS provider, although that may not be a huge advantage if their platform is not comparable to Windows Azure or a possible Apple platform.  Still, Google is vertically integrated in many respects with respect to its cloud computing services.

 

I'm thinking Amazon or perhaps another PaaS provider like MSFT could try to buy LVLT.  I would accept such an offer if LVLT's financing costs don't go down within the next two years.  What I'm worried about is that LVLT will hit more difficulties and have to go to debt holders once again, who will of course take value away from equity holders by negotiating for usurious rates and/or a dilutive transaction.

 

[Myth465]

 

However, I also think that an opportunistic acquiror could emerge because of LVLT's debt burden and low stock price and try to buy the company.  Whether such an acquiror would be successful is another question.  I'm somewhat ambivalent towards accepting an offer and holding for the long run, mostly because the debt holders (including HWIC) are milking LVLT for all its worth, causing pain for equity holders and restraining LVLT's growth.  In fact, there's somewhat of a conflict of interest here on the part of the entities who are both large equity and large debt holders.

 

 

I agree with this and now have furthur insights on how HWIC generates double digit returns on their bond portfolio  :). Its a win win situation. They hold a small amount of common relative to their portfolio and hold a bigger chunk of debt. Then they milk the debt while waiting for the turn. If the turn never comes they have collected interest for years and can probably sell the company to generate a return on the shares.

 

Its how I would play it if I had a giant chip stake. As for me I will continue to watch, I can miss out on 1 - 3 and still do quite well if we are worth 10 to 15 when those pipes are filled.

[Guest longinvestor]

However, I also think that an opportunistic acquiror could emerge because of LVLT's debt burden and low stock price and try to buy the company.  Whether such an acquiror would be successful is another question.  I'm somewhat ambivalent towards accepting an offer and holding for the long run, mostly because the debt holders (including HWIC) are milking LVLT for all its worth, causing pain for equity holders and restraining LVLT's growth.  In fact, there's somewhat of a conflict of interest here on the part of the entities who are both large equity and large debt holders.

As for me I will continue to watch, I can miss out on 1 - 3 and still do quite well if we are worth 10 to 15 when those pipes are filled.

This is also my thoughts re: holding (3) for the long term. er..longer term :-[

 

Let's look at HWIC or SEAM's interest in (3). The bonds are of usury-quality and at the same time paves the runway which (3) needs to keep it from going to zero. They are doing better than 10% with continuous opportunities to deploy capital over 5-10 years. How much better can it get?

 

And let's not kid ourselves, the last mile and the attendant 50-100 year monopoly, regulated deep into life in the US is not likely to get unwound in a matter of a few years. Before someone jumps up and says "12 years", remember that the incumbents got a windfall via the reversal of 1986. That bought them another ten years or so. My belief is that the trend of declining disposable income is the key investment thesis for (3). A return in (3) is likely well correlated with this rate, numerator and denominator. Too much capital invested durng the dotcom era has dragged the numerator somewhat but the sunk capacity is surely being eliminated. Nothing can stand against std of living change, not regulation, nothing. Almost a fact of life.

 

Was'nt it Pabrai who said investors have to slow down their thinking to the pace of value creation. (3) gives you the best lesson in putting that to work. Besides, it is good to be Shylock's owner, I own FFH and Longleaf as well.  ;D

 

[txlaw]

Was'nt it Pabrai who said investors have to slow down their thinking to the pace of value creation. (3) gives you the best lesson in putting that to work. Besides, it is good to be Shylock's owner, I own FFH and Longleaf as well.  ;D

 

 

Haha, it is indeed good to be the loan shark! 

[UhuruPeak]

As for me I will continue to watch, I can miss out on 1 - 3 and still do quite well if we are worth 10 to 15 when those pipes are filled.

 

I bought some last week at 1.21 after reading the whole thread & doing a bit of homework on it, but sold this morning (1.25, got lucky) after digesting the earnings & admitting that I was pretty disappointed. I will keep looking at it & am hoping they do see the QoQ sequential growth they talk about.  Till then, I'll stay out of the stock

[Guest ValueCarl]

Well, I think we are almost all in agreement now!  ;D Big Prem has control of the ball, and will dribble it for as long as his "USURY RATE" can be "DICTATED" all in the wake of the lowest interest rate environment modern man has known in America.  

 

Of course, while he continues to have his way waiting for "organic growth" which isn't sufficient to meet the debt albatross cast around the neck of this POS, he gives men like Stevie Cohen a strengthening position to short and keep Prem's "small equity" stake at bay. Who needs equity anyway!

 

One other thing though. How many years has Sunit represented targeting 3-5X DEBT/EBITDA? It's another song and dance that never comes to fruition. It might even make a more cynical man cry foul while feeling a certain "conflict of interest" which exists. If I hear him say it or see it on a presentation one more time, I won't be able to refrain from upchucking!

 

For example, even if they added another $100MM EBITDA to $1B by the end of this year organically-same aggregate amount of added EBITDA(1/9 vs. 1/8, however)as last year-and by some miracle Prem, etal, converted their $400MM at $1.80 voluntarily, that ratio remains a far cry from being attained.

 

Something needs to "GIVE" sooner rather than later, and it's not going to be predicated upon "ORGANIC GROWTH." imo          

[Guest ValueCarl]

It's funny Brker_guy, but not unlike you I am sure, when visiting a Munger related event, one runs into a host of savvy, business minded people. Well, I met this sharp businessman out of the blue who was from the more western US without going further last May. He advised a number of things inclusive of getting off of the Level 3 train wreck. This was right under Charlie Munger's nose, of all people who maintain Omaha, Nebraska roots.

 

You couldn't make this stuff up because beyond his prediction that health care reform would be overturned by the new Congress-still debatable-he encouraged me to ride the PIPE business of Kinder Morgan Partners, an entity created by a disgruntled Enron man that was going to be in line to take over from Lay, until he pissed off the boss himself with what seems to have been a tangled love affair.

 

Now, I don't have to tell you about the "war reparations" that were paid to Omaha, Nebraskans by Texans because you're very close to that action. Buffett was happy to take an important PIPE away from those Texas boys after Enron's implosion and he was mad as hell that Enron relocated away from Omaha years earlier! And, I don't have to tell you about Bush, and The Carlyle Group and all that other stuff either, because then we start getting into global "ENTERPRISE CORRUPTION" so large that it would take the World Trade Centers down!

 

So, this fine gentleman wanted me to invest in the "politically correct" KMP notwithstanding all the negative stigma surrounding its ilk even if its founder was snubbed luckily in the late nineties causing him to go on his own with an Enron spin off instead.  

 

I'm sure you know many details of what's been happening with the stock including the take private, bring it back public maneuvers by Mr. Kinder, etal. The recent IPO being arranged by Goldman allowing them and Carlyle Group  a partial "exit strategy," is also interesting.

 

My smell for honest management teams really does miss the mark though, because when you look at this guy's "talk" while the stock responds favorably, you would think saints were running this organization. These are very "politically connected" saints, however.  

 

All my guys do, on the other hand, is pay usury rates while their PIPES remain a great deal EMPTY versus the OPPORTUNITY!  >:(  

 

http://www.kne.com/responsibility/

 

We are committed to being a good corporate citizen, conducting ourselves in an ethical and responsible manner, and employing sustainable business practices. Toward that end, we spend hundreds of millions of dollars each year on integrity management programs and maintenance, as we are dedicated to protecting the public, the environment and our employees.

 

At Kinder Morgan we have always prided ourselves on being a low-cost asset operator by eliminating unnecessary expenses. For instance, we don’t own corporate aircraft or tickets to sports events, and we don’t spend money on executive perks or glitzy marketing initiatives. Additionally, we cap senior executives’ base salaries below industry standards and tie their financial incentives directly to the results of the company and their individual performance. My salary is $1 per year, and I don’t receive a bonus, stock options or restricted stock grants. Thus, my financial interests are aligned directly with our shareholders.

 

We pledge to do our best to continue focusing on meeting our customers’ needs, operating our assets safely and efficiently, and fostering mutually beneficial relationships with our stakeholders today to shape a better tomorrow.        

 

 

[Cardboard]

"Core Network Services revenue grew by 2 percent sequentially and 2 percent year-over-year

 

Consolidated Adjusted EBITDA grew by 4 percent sequentially and 4 percent year-over-year"

 

The forecast for negative free cash flow in 2011 is certainly negative and disappointing. However, I believe that the statements above are more important as they demonstrate that the growth trend now seems to be firmly in place. Sunit also mentioned on the call that EBITDA growth is a factor of 2X vs sales growth or the same ratio that was demonstrated in the statements above or in 2010. This means quite a bit of EBITDA improvement with modest sales growth.

 

I should add also that next to none of the Netflix revenues have showed up in Q4. With the kind of bandwidth that such customers are using, you would think that this will turn into material revenues and EBITDA in the not too distant future.

 

Finally, this increased capex that they are forecasting is for "signed orders" as mentioned by Crowe. So, I would not be surprised to hear about new contracts a la Netflix over the course of 2011. These additional dollars of investment or Capex may turn out to be very wise indeed.

 

While it may require a little more patience via demonstrated results if this company remains as a standalone, I do feel that with the kind of secular trends being in place that someone will make a move on Level 3 sooner rather than later.

 

Cardboard

 

[Guest longinvestor]

"Finally, this increased capex that they are forecasting is for "signed orders" as mentioned by Crowe. So, I would not be surprised to hear about new contracts a la Netflix over the course of 2011. These additional dollars of investment or Capex may turn out to be very wise indeed. ...someone will make a move on them....sooner or later........

Cardboard

 

The increased Capex which is not just maintenance Capex is the biggest shift in (3)'s 8 year history( how long I've followed them). They are being aggressive about organic growth and while the mantra of "signed orders" is to reassure, each of these chosen deployments connects and picks up additional accounts along the fiber paths. This is all upside with which Storey's "go local" strategy gains legs. They are adding more sales folks. They are aggressively going after the last mile (last 500 ft :P) of enterprise(medium and large) networks and are happy to compete with VZ/T/Q's of the world. A subtle shift Storey has brought about is "We will pick our enemies" versus "We are the neutral carrier's carrier, meaning everyone's friend". Storey has the battle scars dealing with SBC from his Wiltel days. For those who do not know this, Wiltel (Leukadia) was forced to sell to (3) because SBC pulled the rug from under them. They were a 80% customer. Storey was CEO of Wiltel. The "go local" is his way of $&@king the incumbents. A year or so ago Storey said as much during a media event, "We are happy to go against the incumbents in the enterprise space". (3) is starting from zero market share and the incumbents at 100%. What has happened to Akamai in the CDN space is likely to be repeated in the enterprise space. We are seeing early signs of this in the results. It is ALL upside for (3).

 

Their stated 6 - 18 month payback on this incremental Capex should be the minimum timeframe we should expect before any talk of (3) getting sold is entertained IMO. The stock price is hardly the pound of flesh SEAM, FFH are looking for. We can all huff & puff all we want on message boards but I suspect SEAM and FFH are in no hurry while collecting 10+%. Things are going rather well for them to do something stupid. Selling (3) right now ranks high on the stupid list.

[Guest ValueCarl]

Selling on the "stupid list" is only derived by reflecting on a "price." Until "bids" are garnered, how does one know where a willing buyer's head is whilst be cognizant of all the competitive advantages this network represents!

 

There's a conflict of interest if embedded owners collecting interest from the enterprise are simultaneously preventing a sale which may be "DEAR."

 

BTW, Cardboard, without a sale, and assuming (3) doubles CNS EBITDA again this new year to over $1.1B on an annualized basis-a pre O'Hara mishap number that will end up being four years worth of time in restoring-and the $400MM converts voluntarily without an "acquisition," how do they even come close to Sunit's long stand trumpeting of 3-5X Debt/Ebitda ratio?

 

According to Sunit, the change in CNS related EBITDA was a $100MM/$800MM to over $900MM EBITDA year over year from 2009-2010 which the below numbers can't prove due to "other" revenue mixes, as well as "churn."

 

If these buffoons don't stop selling COTTON CANDY to the CIRCUS AUDIENCE, organic growth will not meet the coveted METRIC excluding ACQUISITIONS! imo    

 

 

Financial Results

Metric ($ in millions) Fourth Quarter 2010 Third Quarter 2010 Fourth Quarter 2009 Full Year 2010 Full Year 2009

Communications Revenue $904 $895 $906 $3,591 $3,695

Other Revenue $17 $17 $18 $60 $67

Consolidated Revenue $921 $912 $924 $3,651 $3,762

Consolidated Adjusted EBITDA(1) $226 $218 $217 $853 $909

Capital Expenditures $117 $133 $80 $436 $313

Unlevered Cash Flow(1) $183 $89 $218 $425 $559

Free Cash Flow(1) $73 ($61) $97 ($97) $44

Communications Gross Margin(1) 61.1% 60.6% 60.2% 60.1% 59.4%

Communications Adjusted EBITDA Margin(1) 24.6% 24.1% 23.8% 23.6% 24.6%

 

http://www.level3.com/index.cfm?pageID=491&PR=986

[Guest ValueCarl]

(3)'s Patent Partner, Big Blue is Soaring "The Cloud" Skies over China.

 

http://www.informationweek.com/news/hardware/data_centers/showArticle.jhtml?articleID=229100310&cid=RSSfeed_IWK_All

 

[dolce2think]

Does anyone know why the European side of the business is strong?

 

After all, many European countries have faster last mile connections than the US, due to the different regulations.

Is capacity and dark fiber less a problem there or is Europe simply streaming more?

 

Cien and JDSU had great quarters, their business is in upswing, as brker suggests the metro lines are growing.

As little insight as I have for now, the current 10G - 160 Channel DWDM is still the cheapest standard.

However, the 40G and also 100G - 80 Channel DWDM is already available. The expectation is that sales will take-off after

2013. Higher standards (1.0 Tbit) are still far away in my opinion and should not hit before 2015.

 

If the video usage is really going ballistic from here, the urge to expand capacity could soon become reality, so

Cien et al. could be on a big extended cycle here. Unfortunately the stocks had pretty good runs already.

 

dolce

[Guest longinvestor]

Does anyone know why the European side of the business is strong?

After all, many European countries have faster last mile connections than the US, due to the different regulations.

Is capacity and dark fiber less a problem there or is Europe simply streaming more?

dolce

Yes it is certainly true that last mile is well developed, just as a point of ref, I spent a few years 1999-02 in a tiny little town in Germany and broadband was available then in that rural community. "National" carriers, Deutsche T-online, France Telecom, BT, Telefonica et al control the space. I imagine that if digging up the streets is difficult in the US imagine doing that in the 1000 year old metros of EU!.

 

EU is run a lot more by engineers versus the US by lawyers. This explains connectivity, engineers invest in good things a lot quicker.

IMO (3) feeds the westward expansion dreams of large EU businesses. The idea of connectivity into NA and SA has to be a great prospect for them. Who else but (3) are they going to partner with? T? VZ? We will keep hearing a lot about EU growth for (3) and it is likely among the stickiest of revenues that (3) has.

[txlaw]

BTW, Cardboard, without a sale, and assuming (3) doubles CNS EBITDA again this new year to over $1.1B on an annualized basis-a pre O'Hara mishap number that will end up being four years worth of time in restoring-and the $400MM converts voluntarily without an "acquisition," how do they even come close to Sunit's long stand trumpeting of 3-5X Debt/Ebitda ratio?

 

Am I wrong in thinking that if we have a top line growth rate of 4% (all of which is high margin CNS growth), that translates to an 8% EBITDA growth rate, which translates into meeting the debt/EBITDA ratio goal in 7 years or so (assuming conversion)?  In the conference call, Sunit said this wouldn't be a decade-long effort.  It seems like he will be right, so long as the debt doesn't grow meaningfully.

 

I have read the call over and over again, and it is now clear to me that the negative free cash flow forecast is a great thing.  Why they didn't articulate this clearly in the press release is beyond my understanding.

 

I also have though a bit more about SEAM and FFH's involvement, and I may have to reverse myself on what I said before.  I think that they just had to do right by their shareholders and extract interest rate terms that would have been at parity with what the market as a whole would have offered.  We can't blame them for getting the same terms as Mr. Market, who thinks that LVLT is junk.  Although I do not necessarily agree with longinvestor that the equity would have been $0 in a reorg, I do recognize the value of having SEAM and FFH as financing partners.

 

The true test will be what sort of interest rate the market will request/demand if LVLT delivers on the top line growth they have promised by implication.  The onus is on management.  I hope they're working hard on getting the Amazon account. 

 

I need to do some more research into possible horizontal integration that would be both accretive and delevering for LVLT.  Any help on this matter would be much appreciated.

[Guest ValueCarl]

This is absolutely true, especially when pondering maintenance capex remains at $150MM-200MM per year dovetailing it with "success based" capex on the balance capital being allocated, as high ROI dollars against dollars are realized just 6-18 months later. However, it would be an even greater phenomenon if SALES worked in the "step functions" that have been implied routinely for ions according to this same management team now. At different step functions, positive free cash flows would remain a fait accompli, as it should have been already.  

 

<I have read the call over and over again, and it is now clear to me that the negative free cash flow forecast is a great thing.  Why they didn't articulate this clearly in the press release is beyond my understanding.>

 

My biggest beef as I huff and puff on an anonymous message board is that, obviously all the "growth forecasts" being trumpeted up until the 2008 implosion, inclusive of the  convertible "share price targets" both "voluntary"($1.80) and "mandatory"($4.00) continue to be unattainable with those sweet heart insiders being assured of fast compounding on the debt vs. the equity. The rub remains in the details of the horrific churn and the price of their capital during the most friendly corporate interest rate periods in modern finance.  

 

Today, for example, we hear Crowe making an excuse about the Big TWO, who are being laggards in supplying "tail circuits" for off net hookups (3) must have. This is nothing new; however, since Crowe has been predicting this for years knowing full well that, access costs would be becoming more onerous for players that didn't own facilities to "ramp" up.

 

It's cute to spew hubris regarding certain institutions content on compounding "rapidly" through the debt side of the equation, versus the equity side, but a lie is still a lie all the same.

 

Let me be clear about the lie again. The top line growth they continued to warrant throughout this negative growth debacle from failed acquisitions for assets that have blown up in owners' faces, were never attainable and still aren't with The Big Two "directing traffic."  

 

Before, the opportunity has only been a reflection of their ability to sell or not to sell from a very small base; 3 percent market share of a $33B enterprise market opportunity for one market "sandbox" which they play in.   It's now in their "control" to moderate "sales," by slowing them down with usury interest hanging over their HEADS, in line with the very competitors who have been trying to kill them all along.    

 

So, it's not a ten year wait, rather another seven year drought from our "trusted management team." Sunit is doing a great job being told what to do, inclusive of shunning necessary acquisitions to work in the necessary "step functions" this business was built to handle.

 

I am sure Stevie Cohen along with such ilk remain happy for being given such long term cover-another business cycle-in order to play their games. Of course, our more long friends can continue to hedge by shorting related "index funds" while saying they don't short their specific company positions.   imo          

[Guest ValueCarl]

Cody Klein sees it my way. Message to management: "A Telecom Shot Heard Round the World(Major Event)," in the wake of your years of talk is required for equity owners vs. bond holders.

 

"LESS TALK: MORE ACTION!"

 

Debt: The albatross around their neck. Total debt on the balance sheet for the period ending December, 2010 was approximately $6.5 billion. In 2011, management expects net cash interest expense to increase to $555 million from $522 million in 2010. I expect 2011 capital expenditures in the range of $480-$520 million. Capital expenditures plus net cash interest expense exceed a billion dollars going forward. EBITDA will not catch up until 2012 assuming no major events occur. This constrains their ability to increase capital expenditures above current levels without incurring more debt, possibly constraining revenue growth in the short term.

 

http://seekingalpha.com/article/251124-level-3-communications-financials-bottomed-and-will-improve-slowly-over-time?source=yahoo

[txlaw]

My biggest beef as I huff and puff on an anonymous message board is that, obviously all the "growth forecasts" being trumpeted up until the 2008 implosion, inclusive of the  convertible "share price targets" both "voluntary"($1.80) and "mandatory"($4.00) continue to be unattainable with those sweet heart insiders being assured of fast compounding on the debt vs. the equity. The rub remains in the details of the horrific churn and the price of their capital during the most friendly corporate interest rate periods in modern finance.  

 

Today, for example, we hear Crowe making an excuse about the Big TWO, who are being laggards in supplying "tail circuits" for off net hookups (3) must have. This is nothing new; however, since Crowe has been predicting this for years knowing full well that, access costs would be becoming more onerous for players that didn't own facilities to "ramp" up.

 

It's cute to spew hubris regarding certain institutions content on compounding "rapidly" through the debt side of the equation, versus the equity side, but a lie is still a lie all the same.

 

. . .

 

Sunit is doing a great job being told what to do, inclusive of shunning necessary acquisitions to work in the necessary "step functions" this business was built to handle.

 

These are very serious accusations you are throwing around.  You are essentially saying that management is purposefully constraining growth, M&A, and refinancing at lower rates in order to throw "sweet heart" deals to FFH, SEAM, and possibly WEB.  Where's the evidence for this other than a low stock price?  I find it highly unlikely that FFH, SEAM, and WEB would engage in such "sweet heart" deals.  Those guys are both smart and honest.

 

At most, management can be accused of being overly optimistic, being too eager to over-promise while risking the chance of under-delivering, and possibly of being poor operators.  The last accusation is debatable.  We did, after all, just go through the worst financial crisis since the Great Depression.

 

ValueCarl, please don't take this the wrong way, but I believe you are jumping to the wrong conclusion as a result of an "all in bet" on LVLT equity, perhaps at prices materially above where it is currently trading, that is wrongly influencing your opinion of management and other stakeholders. 

 

I am sure Stevie Cohen along with such ilk remain happy for being given such long term cover-another business cycle-in order to play their games. Of course, our more long friends can continue to hedge by shorting related "index funds" while saying they don't short their specific company positions.   imo   

 

I can understand your frustration with LVLT, as you have clearly been holding for a long time, but a low price is not always the result of stock manipulation.  I am not aware of any misinformation being spread across the market or any collusion that is the reason for Mr. Market's distaste for LVLT.  Hell, there are plenty of smart people on this board who think that LVLT is an absolute dog.

 

The market is in "show me" mode right now.  If LVLT can deliver this year now that we are at an inflection point with respect to the growth of data moving across the Internet (the part of the hockey stick where it really goes vertical), they will be able to get financing from the market -- and not just their current financial backers -- at rates materially lower than what they are currently paying.

 

[Guest ValueCarl]

Actually, I am not "all in" as you think, txlaw. Nor is my basis unbearable even while never selling a share. As a matter of fact at 60 cents right up to the Admiral's buy at $1.15, I am very comfortable with the stake looking forward. Thanks for your concern though. However, I do not take kindly nor should any investor tolerate such paltry returns showing at the top line, while the management team continues to represent them as great only by "excluding" churn! I despise under performance, and this enterprise keeps under-performing relative to the opportunities they have represented for IONS!  

 

My speculation shouldn't be taken lightly since that, those "converts" were structured with the "expectation" that those insiders would be paid until full maturity in 2013, as is panning out with perfect foresight. As for WEB, I haven't seen him collect 15 percent from (3) directly, as others are, have you? His Junior convert was at 9 percent more than EIGHT YEARS ago, go figure! I'll continue to say fifteen percent is an outrageous albatross on the necks of all equity owners until it is ERADICATED!

 

I have stated this for a long time now, and I'll say it again: With friends like that, who needs enemies!  

 

If there is a learning experience for all members choosing to observe this slow burn investment that requires the hyper portion "hockey stick" growth, it is embedded in the information on the day that convert was priced including the 2013 time frame. It continues to represent how equity was going to trade while full interest according to its fullest time would convert into dirt cheap equity later.    

 

At the same time, they refuse to allow this company to do the most important thing it must do in order to break away! That being, continue "consolidating" the space as the "natural consolidator" it continues warranting. Otherwise, fire the leader of the staff who visits our calls quarterly, while not offering his owners a morsel of food for his attendance. There are MILLIONS in SALARIES to be SAVED by our owners(all) if acquisitions are being precluded by the inner eye calling the shots!

 

I think this board should follow Cody's model, since historically up to and including today, this civil engineer converting into a financial engineer is being followed by smart money in uncanny ways. I notice he ratcheted up the discount rate by one hundred basis points also, and this stock is on target to meet the "voluntary" $1.80 conversion strike somewhere near "full maturity."

 

Finally, I would be happy to be proven wrong when the inner eye gets their foot off of that fifteen percent racer's pedal being applied to (3)'s throat, and accelerate high margin EBITDA's as well as FCF's by rolling up a large player in the space. I want those shares converted fast!  The other way I can be proven wrong, is for Crowe and Patel to put up their own damn money where their mouths are, with key reference to Crowe more than Patel.

 

Don't worry though. This is just an anonymous message board where huffing and puffing over inequities as well as sharing information for others to learn by, means absolutely nothing! Ask LI! For otherwise, if I could, I would HUFF and I would PUFF, and I would blow Jim Crowe's HOUSE DOWN!  ;)     

 

All just my opinion, of course.  

 

In the mean time, (3) needs to stop the churn forthwith!

 

 

Level 3 Communications, Progress Software, and Yankee Group Speak Live About Customer Experience Management at 2:00pm EST on February 8th, 2011       02/07 07:24 AM

 

 

 

   <<

   As service providers grapple with customer churn, Level 3 has teamed up

   with Progress to improve customer retention through a proactive CEM

   strategy

 

 

 

 

   >>

 

ANN ARBOR, Mich., Feb. 7, 2011 /CNW/ -- The leading communications information technology publication, Pipeline (www.pipelinepub.com) will be moderating a live and interactive panel discussion featuring Level 3 Communications (LVLT:$1.22,00$0.00,000.00%) , Progress Software (PRGS:$30.08,00$0.27,000.91%) , and Yankee Group tomorrow at 2:00pm Eastern Standard Time.

This exclusive webinar will explore Customer Experience Management (CEM) trends, real-world implementation scenarios, and the necessary requirements to implement a successful CEM strategy. Those interested in attending this live event can register at: http://ow.ly/3Q684.

This event will be moderated by Pipeline's Editor-in-Chief, Tim Young and will feature:

   <<

 

   --  Kirt Schumann (Bio), Director, Business Process Change, Level 3

       Communications (LVLT:$1.22,00$0.00,000.00%)

   --  Sanjay Kumar (Bio), Industry VP, Communications & Media, Progress

       Software (PRGS:$30.08,00$0.27,000.91%)

   --  Susan McNeice (Bio), VP of Software Research, Yankee Group

 

   About Level 3 Communications (LVLT:$1.22,00$0.00,000.00%)

   >>

 

Level 3 Communications, Inc. (LVLT:$1.22,00$0.00,000.00%) is a leading international provider of fiber-based communications services. Enterprise, content, wholesale and government customers rely on Level 3 to deliver services with an industry-leading combination of scalability and value over an end-to-end fiber network. Level 3 offers a portfolio of metro and long-haul services, including transport, data, Internet, content delivery and voice. For more information, visit www.level3.com.

   <<

 

   About Pipeline Publishing, L.L.C.

   >>

 

Now in its 7th year of publication, Pipeline serves as the information-conduit between the world's leading service providers and technology providers. To subscribe, visit: http://www.pipelinepub.com.

   <<

 

   About Progress Software Corporation (PRGS:$30.08,00$0.27,000.91%)

   >>

 

Progress Software Corporation (PRGS:$30.08,00$0.27,000.91%) provides application infrastructure software for the development, deployment, integration and management of business applications. Our goal is to maximize the benefits of information technology while minimizing its complexity and total cost of ownership. Progress can be reached at www.progress.com or +1-781-280-4000.

   <<

 

   About Yankee Group

   >>

 

The people of Yankee Group are the global connectivity experts-the leading source of insight and counsel trusted by builders, operators and users of connectivity solutions for nearly 40 years. We are uniquely focused on the evolution of Anywhere connectivity, and chart the pace of technology change and its effect on networks, consumers and enterprises. Headquartered in Boston, Yankee Group has a global presence, including operations in Europe, the Middle East, Africa, Latin America and Asia-Pacific.

   <<

   Media Inquiries:

   Paula Zimmerman

   Publisher

   Pipeline

   (312) 962 - 0120

   paula@pipelinepub.com

   www.pipelinepub.com

             

[Guest ValueCarl]

txlaw, my savvy investor friend. It appears that SEAM is "ALL IN" this quarter and added another 60MM shares of toilet paper to their clients' book. I also noticed a slight increase in their tw telecom stake as of yesterday as well, if I am not mistaken. Yesterday, I noted Vanguard's increased stake on a different venue also.

 

Importantly, as respects tw telecom(TWTC),  I believe I located the "reasons" that they became a large customer of (3) in the Renesys report provided earlier, and referenced as being Q4 of 2010.

 

When I tell you and others that, ALL INTERNET PROTOCOL ROADS lead to Level 3 Communications(LVLT), that would include old roads, new roads, and roads still being ENVISIONED as part of the VISUAL INTERNET!

 

By the way, Big Prem's Q4 "swing at the plate" or not, is up next!    

 

This network partner you can rely on continues to pave the way for peace across the globe via ubiquitous internet connections, yet "Mr. Manipulator" continues to shun it in favor of the old guards.  

 

 

 

http://www.sec.gov/Archives/edgar/data/794323/000080798511000025/lvlt13g10.txt

[brker_guy]

ValueCarl, you are on funny dude!  ;D :D

 

It appears that SEAM is "ALL IN" this quarter and added another 60MM shares of toilet paper to their clients' book.

 

Sorry for being quiet of late.  Been on the road lately, and the jet lag is killing me.  But I saw your post, and will respond to them.  :D

[Guest ValueCarl]

Well, Brker_guy, toilet paper is getting expensive!!!!!!!!!!!!!!!! Have you been to COSTCO's lately? Their generic brand is still low cost per sheet, but at eighteen dollars per 36 roll count, or 50 cents each, I am beginning to see a benefit to "crapping out!"  I can't wipe my behind like I used to in America anymore!  ;D Can't wait to hear from you, and while you're at it, try to do everything in your power to get Big Prem off of that "INTEREST RATE PEDAL," would you? And, don't tell Longinvestor that "message boards" can accomplish anything beneficial or otherwise negative, though, O.K.? You and I know much better than that! IMO

[txlaw]

txlaw, my savvy investor friend. It appears that SEAM is "ALL IN" this quarter and added another 60MM shares of toilet paper to their clients' book. I also noticed a slight increase in their tw telecom stake as of yesterday as well, if I am not mistaken. Yesterday, I noted Vanguard's increased stake on a different venue also.

 

 

http://www.sec.gov/Archives/edgar/data/794323/000080798511000025/lvlt13g10.txt

 

Wow.  That is a beautiful thing!  Reminiscent of a move by my favorite investor in a real estate company that has been getting a lot of press as of late.  ;D 

 

Looking forward to seeing if HWIC's stake changes in the next filing.

[Guest ValueCarl]

My apologies, txlaw. I seem to have missed an important footnote relating to this quarterly filing. This fact doesn't change their common share position very much one way or the other since last quarter as I had originally thought . 

 

 

Item 4. Ownership:

 

    (a). Amount Beneficially Owned: (At 12/31/10)

          537,757,880 shares.  This amount includes 62,070,004 in shares

          underlying convertible bonds.

    (b). Percent of Class:

 

          31.1%