Internet Provider in USA For the 6 months ended 6/00, revenues rose 50% to $333M. Net loss from continuing opts. before extra. item applicable to Common increased from $210M to $418.9M.
Bankruptcy Bell Tolls for ICG Communications -- 1:00 PM EST
by Todd Truitt
ICG Communications [ICGX: Nasdaq] filed for bankruptcy Tuesday, falling prey to the shakeout we've been predicting among the competitve local exchange carriers (CLECs). As we indicated back in September, the time has come to stop playing the cello and get in a lifeboat. CLECs that lack full funding for their business models will be cannibalized – either by bankruptcy court or one of the industry survivors. We recommend the sector stalwarts that have the capital to survive and thrive: McLeodUSA [MCLD: Nasdaq], Allegiance [ALGX: Nasdaq], and XO Communications [: Nasdaq].
ICG will either sell its assets (with bondholders carving up the proceeds) or attempt to restructure -- we're betting it will try the former. Among the casualties in the debacle are equipment vendors, including Lucent [: NYSE] and Cisco [CSCO: Nasdaq], and service vendors such as Qwest [Q: NYSE] and Worldcom [: Nasdaq]. The amount owed to these entities ranges from $30m to $60m. How and when they'll be paid will become serious debate.
It becomes clearer with each passing week that more bodies will litter the landscape over the next few months. One that fits the ICG mold is PSINet [PSIX: Nasdaq], which has indicated it needs another $500m to complete its network. Our guess is that this won't happen in the current environment, and the stockmarket has confirmed that PSINet is also in trouble.
With its recent S3 filing to issue more stock, Weblink Wireless could be falling into this category as well.
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