LVLT - Level 3

[FFHWatcher]

Imagine what you two could accomplish if you put your energy into something worthwhile?  The yahoo board wants you two back.

[Guest ValueCarl]

Ben Graham, I found this article you had provided on another venue as well as here, very valuable. Thank you!

 

http://www.cisco.com/web/about/ac79/docs/sp/10_Reasons_Future_of_TV_IBSG.pdf

 

FFHWatcher, I'll get my answer from my company contact person in finance. I'll report back to the board when I understand it more thoroughly, including what potential "investment capital" might be necessary going forward to keep up with unwanted dilution according to certain events which may be unwelcome by the management team. 

[biaggio]

Hey guys, Howard Marks bought some LVLT.

 

http://www.gurufocus.com/news/148808/oaktree-capital-portfolio-update-buys-cit-cmcsa-vsh-rio-cmls

 

 

[Guest ValueCarl]

Ben Graham, I would have to disagree with you on Level 3 being obscure, not to mention that it is hardly a small cap under the radar screen of institutional money managers in the field of play.

 

As a matter of fact, LVLT is the most despised, oftentimes treated with disdain, misunderstood, vastly manipulated stock believed to be telecom versus internet based in our known universe.

 

The institutions in the playing field around it are sure to continue believing they can rule over it with impunity as they predict the numbers or lack of numbers with uncanny clairvoyance. This is not the stock for people with faint of heart, or people who believe in "Armageddon."  :-X

 

Heck, if you continue following the sentiment of the naysayers all around it, you would think failure is the only option, somewhat like our mismanaged US government for multiple decades, and any remote success to be realized may take another thirteen years to build all the IP roads necessary to circumvent the last mile guards defending their gates from the inevitable invasion.

 

Charles T. Munger and Mohnish Pabrai can't figure it out-"too hard to figure"-so why would Howard Marks offer you any solace otherwise? Charlie sits right next to Walter Scott when burping with one another around the Berkshire meeting table. If anyone would understand it, and be able to explain it to him, it would be Walter Scott.

 

The stock remains a dirty wash rag, and the proof in the pudding-exponential top line growth rates translating to highly levered, high margin bottom lines-continues to be an illusion that only Jim Crowe could cackle about for so long without having his head chopped off of his leadership role.  >:(   

 

"It might as well be him!" 

 

 

[Guest ValueCarl]

Ben Graham, is relentless the right word for you, or passionately convicted? Great data points as always.

 

Yes, you are right that I would defend against the Bear Argument whenever I can, and as you know, I have for many years much to my own chagrin because "The Street" calls the shots, and they won't let go.  By the way, now it's going to take 3MM shares with buy biased interest daily, the equivalent of what was 45MM shares--possibly double counted comparatively on nasCRACK--to move the needle just 1.7 percent. Anecdotally, and assuming all trading is fair, NYSE/EURONEXT appears to be a "slower burn," and while you consider the 1:15 reverse split, even more painful, unless someone wakes us up out of the BIG BLUE with a fair bid reflecting IV!   

 

"WHEN" does it end, Ben? We now have 1000 quota bearing, commission based salespeople pounding the pavement eager and hungry to deliver essential, state of the art communications services on three continents, so I expect this STOREY to show a big sales announcement weekly at a minimum, but it must go further than that!

 

How much further you ask? I am tired of selling services for "FREE!" Services that used to go to Internet 2 that weren't in (3)s "price book," but CTO, Jack Waters, gave them away anyway!

 

Not too long ago, for example, we added this innovative, very complex, E911 solution for Microsoft, and the PR went on to say it's a "FREE AD ON" for our customers!

 

What does Billy/Ballmer give their customers for FREE unless there's a GAFF for the CATCH?

 

Are we CAPITALISTS at Big (3) as we have been told for ions now, or are we SOCIALISTS subsidizing a SOCIAL EXPERIMENT for the AGES?

 

Every SALE those 1000 men and women bring to our table must be profitable, or this company with all of their "military men" on the board continues to be a CLUSTER FUCK, and it's in the urban dictionary for reference before I become X rated.

 

http://www.urbandictionary.com/define.php?term=clusterfuck

 

As for Howie being excited about "DRONES" that will now keep him from hopping onto his tractor early in the morning? Well, if Howie isn't happy, then his father will be, because now Howie has more time for Angelina Joline!  ;D

 

             

[DCG]

Amazon is making more content available to be delivered by Level 3

 

Amazon already has licensing deals in place with CBS, NBC Universal, Fox, Sony Pictures Television, BBC, PBS, National Geographic, Magnolia Pictures, IFC Films, Egami Media, Vivendi Entertainment, New Video Group, Fred Rogers Company, Strand Releasing, Music Box Films, Film Movement, Reel Media and Sesame Workshop. Content can be streamed to more than 300 devices including connected TVs, PCs and Macs, the Kindle Fire and more.

 

Read more: Amazon expands PBS content deal to add 'Nova', 'Frontline', 'Julia Child' - FierceOnlineVideo http://www.fierceonlinevideo.com/story/amazon-expands-pbs-content-deal-add-nova-frontline-julia-child/2011-10-19#ixzz1bWOw2DMe

 

***

 

Hasten the equipment build inside the Level 3 core network.

 

Verizon’s LTE adds show faster is better, but can telcos keep up?

 

 

http://gigaom.com/broadband/verizons-lte-adds-show-faster-is-better-but-can-telcos-keep-up/?utm_source=GigaOM+Daily+Newsletters&utm_campaign=64dc652792-c%3Amob%2Ctec%2Cvid+d%3A10-22&utm_medium=email

 

These articles (and many of the other links in this thread) don't even mention LVLT. Are these accounts of LVLT or are you guys just posting every article related to online media delivery?

[Guest ValueCarl]

http://level3.mediaroom.com/index.php?s=23600&item=64352

 

http://aws.amazon.com/directconnect/

 

http://level3.mediaroom.com/index.php?s=23600&item=64813

 

http://connectedplanetonline.com/3g4g/news/Willingness-to-lay-fiber-likely-helped-Level-3-win-Verizon-LTE-backhaul-business-0420/

[brker_guy]

Carl,

 

Good response to DCG.  It's hard for people to see the facts inside the "Cloud". :) :)

 

http://www.securityweek.com/level-3-enables-private-cloud-option-amazon-web-services

 

http://10-gigabit-ethernet.tmcnet.com/topics/10-gigabit-ethernet/articles/210501-amazon-web-services-selects-level-3.htm

 

Here is VZ' results from Friday and their discussion of LTE traffic:

 

http://seekingalpha.com/article/301177-verizon-communications-management-discusses-q3-2011-results-earnings-call-transcript?source=yahoo

 

Importantly, 52% of the retail postpaid net adds in the quarter were 4G LTE smartphones and Internet devices, up from 30% in the second quarter.

 

We sold a total of 1.4 million 4G LTE devices in the quarter. Just over 1/2 of these were smartphones and the rest were Internet data devices. Shifting now to ARPU, retail postpaid ARPU was $54.89, up 2.4% year-over-year, which is a 50 basis point improvement in growth from last quarter.

 

We continue to see strong demand for our 4G LTE mobile hotspot devices and PC cards as well as tablets.

 

http://seekingalpha.com/article/301177-verizon-communications-management-discusses-q3-2011-results-earnings-call-transcript?part=qanda

 

And then from an overall device perspective is that the lead that we have around LTE 4G and the 15 devices including notebooks that we have in that ecosystem is unsurpassed by any competitor. And I think we have a strategic advantage here, and we sold more 4G devices this quarter than we did last quarter. I will tell you that if you look at our Internet devices, about 95% are all now 4G LTE, and that's a big deal for us because that means we are now moving high-end users on MiFi and dongles off of 3G network on to 4G, which obviously frees up spectrum and reduces our capital expense, which you saw here in the third quarter.

 

A lot of LTE traffic and LTE revenue from VZ will find their ways onto LVLT's network and onto LVLT's top line...

[Guest ValueCarl]

Ben Graham, don't hide or feel it necessary to be coy or shy with us now!

 

Are you attempting to quote Charles T. Munger, "Sit back on your ass, and grow wealthy" while pointing to the ever RISING intrinsic value of Big (3) during the next twenty years at least!  ;)

 

It's true that, if you sell at four or six, or $60 or $90 today, you will look like a FOOL later on!  ;D

 

This being said, get Big Jim on the phone! I want my "delicious" APPLE to be served to me on my BREAKFAST TABLE tomorrow morning!!!!!!!!!!

 

<That yes, at times I do become passionate with relentless conviction that the Intrinsic Value of LVLT will be recognized. I'm in this game to see the gap filled from my cost basis to full value. But looking 5, 10, 20 years ahead, I just don't see that happening due to the enormous growth potential the global demand has for raw bandwidth. So, we are in for a great wild upward ride for all those who have the courage to hang on to this Tiger called Level (3).>

 

[FFHWatcher]

How can anybody possibly take you two seriously? 

 

ValueCarl seems to know a lot about telecom and LVLT yet neither of you post in an intelligent constructive useful manner.  What gives?  I know I could avoid reading your posts but it's like going by an accident scene, you just have to look.  Here is a short partial list of annoyances that I have compiled;

 

- you include links that have nothing to do with LVLT, telecom, etc. and waste peoples time constantly

- you post ridiculous lines that are absolutely terrible attempts at wit and I don't know what you are attempting to do with  them, such as; "This being said, get Big Jim on the phone! I want my "delicious" APPLE to be served to me on my BREAKFAST TABLE tomorrow morning!!!!!!!!!!" or "Cluster bombs are bursting -  The T(r?)end is Level (3)'s Friend" or "As for Howie being excited about "DRONES" that will now keep him from hopping onto his tractor early in the morning? Well, if Howie isn't happy, then his father will be, because now Howie has more time for Angelina Joline!  ;D "  Useless drivel in my opinion.

- you constantly reference Charlie Munger and Warren Buffett in some sort of attempt to legitimize that Level 3 is a great value.  It may be a great value but using Buffett and Munger's names in almost every message does not make it so even if Buffett is from the same town as the Chairman of LVLT

- you each post a few times per day

- you avoid discussing that Level 3 keeps acquiring companies yet their revenue never goes up. You rarely, if ever, discuss the numbers, the losses, the debt, the HUGE growth of the internet yet no growth at LVLT in the past 5 years...you know, the important stuff when determining if a company is a good value.  The best I have seen lately is the pointing to someone else's analysis of the numbers (who, by the way clearly states that Level 3 is absolutely NOT a Ben Graham type investment, so why a poster named 'Ben Graham' names LVLT as his largest or only holding is perplexing to me...).

- you each use bold, CAPS LOCK, different colors, etc., for god knows what reason

- you constantly compliment each other stating how bright each one of you are, yet know one else is?

- 'Ben Graham' includes a link at the bottom of each one of his posts to bengrahaminvesting.ca at the University of Western Ontario.  What does that have to do with you?

 

- like I said, the list is partial.  There are many more.

 

 

Anybody who takes ValueCarl and Ben Graham seriously, please do a simple reply to this post and type +1 or +2 and so on, maybe even include a couple of useless links to youtube videos that are about something unrelated to telecom, LVLT or anything for that matter.  If you get to +5, I will appreciate that at least a few people are benefiting from your posts and leave this thread alone.  Otherwise, there is lots of room at the Yahoo Message Board.

[Guest ValueCarl]

Ben Graham, +175! ;D

 

Now we can discuss Charles T. Munger, "Level 3 is too hard to figure" in much greater detail. This discussion will open up whole new worlds to what Charlie may or may not be thinking while sitting around the Berkshire meeting table with Warren's friend, "a great builder," Walter Scott.

 

It's not impossible to think that, Warren knows that Walter, "a great builder" will NOT stop building internet roads until all the eyeballs on planet earth have been seamlessly connected with internet protocol highways.

 

This could scare the hell out of the 81 year old man!  ;D FFHWatcher, if I were rating you on this particular board, you would get a NEGATIVE 175, fail the class, and be asked to place a DUNCE CAP on your HEAD and sit in the corner with your mouth closed if you PERSIST in adding negative value to this thread!        >:(

 

(7)”For society, the Internet is wonderful, but for capitalists, it will be a net negative. It will increase efficiency, but lots of things increase efficiency without increasing profits. It is way more likely to make American businesses less profitable than more profitable.  This is perfectly obvious, but very little understood.” 

 

(16)”Failure to handle psychological denial is a common way for people to go broke. You’ve made an enormous commitment to something.You’ve poured effort and money in.  And the more you put in, the more that the whole consistency principle makes you think,” Now it has to work. If I put in just a little more, then it ’all work…. People go broke that way —because they can ’t stop,rethink,and say,’ I can afford to write this one off and live to fight again.  I don’t have to pursue this thing as an obsession —in a way that will break me .’ “

 

(173)”If the technology hadn’t changed, [newspapers would] still be great businesses. Network TV [in its heyday,] anyone could run and do well.”

 

(174)”The great lesson in microeconomics is to discriminate between when technology is going to help you and when it’s going to kill you. And most people do not get this straight in their heads. But a fellow like Buffett does.  For example, when we were in the textile business, which is a terrible commodity business, we were making low-end textiles—which are a real commodity product. And one day, the people came to Warren and said, “They’ve invented a new loom that we think will do twice as much work as our old ones.”  And Warren said, “Gee, I hope this doesn’t work because if it does, I’m going to close the mill.” And he meant it.  What was he thinking? He was thinking, “It’s a lousy business. We’re earning substandard returns and keeping it open just to be nice to the elderly workers. But we’re not going to put huge amounts of new capital into a lousy business.”And he knew that the huge productivity increases that would come from a better machine introduced into the production of a commodity product would all go to the benefit of the buyers of the textiles. Nothing was going to stick to our ribs as owners.  That’s such an obvious concept—that there are all kinds of wonderful new inventions that give you nothing as owners except the opportunity to spend a lot more money in a business that’s still going to be lousy. The money still won’t come to you. All of the advantages from great improvements are going to flow through to the customers. Conversely, if you own the only newspaper in Oshkosh and they were to invent more efficient ways of composing the whole newspaper, then when you got rid of the old technology and got new fancy computers and so forth, all of the savings would come right through to the bottom line. In all cases, the people who sell the machinery—and, by and large, even the internal bureaucrats urging you to buy the equipment—show you projections with the amount you’ll save at current prices with the new technology. However, they don’t do the second step of the analysis which is to determine how much is going stay home and how much is just going to flow through to the customer. I’ve never seen a single projection incorporating that second step in my life. And I see them all the time. Rather, they always read: “This capital outlay will save you so much money that it will pay for itself in three years.”  So you keep buying things that will pay for themselves in three years. And after 20 years of doing it, somehow you’ve earned a return of only about 4% per annum. That’s the textile business. And it isn’t that the machines weren’t better. It’s just that the savings didn’t go to you.  The cost reductions came through all right. But the benefit of the cost reductions didn’t go to the guy who bought the equipment. It’s such a simple idea. It’s so basic. And yet it’s so often forgotten.  Then there’s another model from microeconomics which I find very interesting. When technology moves as fast as it does in a civilization like ours, you get a phenomenon which I call competitive destruction. You know, you have the finest buggy whip factory and all of a sudden in comes this little horseless carriage. And before too many years go by, your buggy whip business is dead. You either get into a different business or you’re dead—you’re destroyed. It happens again and again and again.  And when these new businesses come in, there are huge advantages for the early birds. And when you’re an early bird, there’s a model that I call “surfing”—when a surfer gets up and catches the wave and just stays there, he can go a long, long time. But if he gets off the wave, he becomes mired in shallows…”

 

 

 

 

 

[Guest ValueCarl]

What a difference one trading day makes!

 

What difference you ask? Friday Options Expiration dates.

 

Today, with just 13 percent more buy side volume at 3.4MM shares versus Friday's 3MM shares, we traded up 6.60 percent vs. 1.7 percent! If we do a bee line to where this might have been on Nasdaq, or approx. 51MM shares, and assuming there was buy side interest, we may have been on a percentage basis higher, but today was still better than a sharp stick in the eye!

 

This being said, over the years I have known no more manipulative, quite frankly, fraudulent operations in trading markets than what comes out of the Chicago Board of Options Exchange!  >:( I believe I will be setting a precedent case with them near term based upon some recent calculations for trades that should be precluded from ever occurring on their books.       

[tombgrt]

Guys, aren't you afraid the intellectual opportunity cost from (over)evaluating this company could get out of hand?

 

Just asking!  ;D

 

 

Not yet considering a break from watching this company like a hawk with ADD?

 

Just saying as I only got an answer from brker_guy back when I posted the above and I believe you guys can benefit from it. What do you think?

 

Also I believe FFHWatcher is correctly highlighting some of the doubts most members reading this topic are having. A lot of biases are at play here imho. No comments whatsoever?

 

 

[Guest ValueCarl]

I am busy listening with ADD the "TRENDS" in VIDEO STREAMING!  ;)

 

http://ir.netflix.com/eventdetail.cfm?eventid=103340

[brker_guy]

Tombgrt,

 

Not sure what you meant by this:

 

Just saying as I only got an answer from brker_guy back when I posted the above and I believe you guys can benefit from it. What do you think?

 

What do you mean that you got an answer from me?  What did I answer you on?

[tombgrt]

You replied this on my post I just quoted (in my previous post):

 

Tombgrt, you are right.  May be I need to zip my lips about LVLT and let Mr. Market votes on LVLT.  I have said all I want to say about the company, the importance and economic impact of LVLT to technology for the future generation.  We just have to sit back and watch how the movie ends, don't we?

 

In my head, I know what would be the replacement cost of LVLT's network and "system-of-systems" if someone was to build it from scratch today.  It's a fruitless exercise for me to convince anyone else to accept my POV...

 

So, Mr. Market will have his says, and LVLT will execute on its integration of GLBC and its business plan.  So, LVLTbGRT!!!!  :D ;D

[brker_guy]

Tombgrt,

 

Ok, got it!  I am still upholding my words on it.  Not beating up on this topic and let Mr. Market votes on it going forward.

 

It's all down to execution for LVLT and its management from here on out.  No more excuses if they mess this up...

[tombgrt]

Tombgrt,

 

Ok, got it!  I am still upholding my words on it.  Not beating up on this topic and let Mr. Market votes on it going forward.

 

It's all down to execution for LVLT and its management from here on out.  No more excuses if they mess this up...

 

Great. I think that is the best way to invest. Learn all you can, then decide wether you should invest and lay it down until Mr. Market gets rational again. No need for more confirmation bias than you already collect just by posting here on a regular basis imo!  ;D

 

I'm still rooting for this potential multi-bagger, best of luck!

[Guest ValueCarl]

Hi Tombgrt,

 

Since Brker_guy has been as quiet as a church mouse lately, really for a few months now, I was sure you were referring to Ben Graham and me.

 

In any event, I am glad to see you are riding the Level 3 Train which may still become a gravy train in front of us, assuming you believe the "trends" that men like Reed Hastings were calling out during his Netflix conference as respects the flow of massive video content over the internet in real time and during the next couple of years continues.

 

Hopefully, Walter Scott's favorite investing technique of finding unstoppable "trends" is our friend, and it's not missed "this time."

 

By the way, had you purchased any call options before the reverse split? 

 

 

 

[brker_guy]

http://www.cnn.com/2011/10/27/tech/web/netflix-internet-bandwith-mashable/index.html?hpt=hp_t2

 

http://www.sandvine.com/downloads/documents/10-26-2011_phenomena/Sandvine%20Global%20Internet%20Phenomena%20Report%20-%20Fall%202011.PDF

 

 

[Guest ValueCarl]

Replacing the program for phones with the so-called Connect America Fund for broadband is part of Genachowski’s effort to spur economic growth by increasing the availability of high- speed Internet service.

 

“We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined,” Genachowski said before the vote at an agency meeting in Washington. The expanded broadband may result in “hundreds of thousands of jobs” in rural areas, he said.

 

http://www.businessweek.com/news/2011-10-28/fcc-creates-4-5-billion-internet-fund-for-era-of-steve-jobs-.html

[Cardboard]

How long have we been hearing about these 100,000 businesses within 500 ft of Level 3 network? What is taking so long to connect them? If the offering is that good then why it is not done already? Why does management seems satisfied with a once in a while 2% sales growth quarter over quarter?

 

The CFO has done his job very well continually refinancing a struggling company and he continues. The Global Crossing deal is also sound financially. The problem I have is with the operations guys and a CEO that does not set high enough objectives. I detect no sense of urgency.

 

I think it is time for Hawkins and Watsa to tell Crowe to retire and to put in there a highly demanding and go get'er type of guy.

 

Cardboard

[DCG]

It is alarming that over the last several years, when the demand for streaming content has already greatly increased, LVLT losses have continued to increase rather dramatically.

[brker_guy]

"It is alarming that over the last several years, when the demand for streaming content has already greatly increased, LVLT losses have continued to increase rather dramatically."

 

Let's see.  In 2001, streaming was at its developmental stages.  Full scale streaming has only begun to take shape the last 4 years.

 

Furthermore, in 2001, LVLT's revenue was $300MIL.  Today, it's $6.2BIL!  EBITDA is expanding again in the 25-30% range. 

 

What earning reports have you been reading, DCG?

 

 

[brker_guy]

"you forgot to mention that share count has gone up ten times over that period. and that pretty much tells you why the price is about $1.40 right now."

 

In your two hands, count how many competitors does LVLT have left from the old telecom boom.  Then, you should ask yourself of those shares count were justified.  Count them.  Start with Qwest.....