Buffett bailout of WorldCom raises questions of influence
http://www.usatoday.com/money/columns/maney.htm An interesting history, especially for those of us (like myself) that didn't experience it first-hand. I've often wondered what would happen if MSFT gained control (in name or in fact) of any significant piece of the backbone ... -- -= Scott Francis || darkuncle (at) darkuncle (dot) net =- GPG key CB33CCA7 has been revoked; I am now 5537F527 illum oportet crescere me autem minui
Where does it talk about a "Buffett bailout out WorldCom"? Buffett invested $100 million in Level 3 (the rest of the $500 million came from others). Hardly a bailout, and nothing to do with WorldCom. What am I missing? "Questions of influence"? Is it really news to speculate that people might do business with their friends and people with whom they have a prior business relationship? Anyone who fears a Microsoft entry into telecoms would do well to study its foray into cable investments. Bradley
Where does it talk about a "Buffett bailout out WorldCom"? Buffett invested $100 million in Level 3 (the rest of the $500 million came from others). Hardly a bailout, and nothing to do with WorldCom. What am I missing?
The funny thing is: (a) Buffer's insurance company is known for a great arbitrage abilitites. It never needed to publish its short positions, so there is no reason not to believe that it could have held LVLT common short. In that case you have a convertible arbitrage game that pays you 6x FED overnight in the interest. (b) As LVLT stock shot up 50% on the news and put convertible into the money, a holder of the convertible could immediately go and short the common at the convertible ratio. Instant 50% in a single transaction, with the short position still paying 6x FED overnight. (c) Finally, pay attention how WCOM bonds traded before, during and after news. As the WCOM scandal hits the press, the bonds drop to a nearly default level (10c on a dollar). Buy $2B of WCOM bonds, which gives it 20B of face value. Do the deal. Watch WCOME bonds rise 10%. Sell them. now go to (a) or (b).
Anyone who fears a Microsoft entry into telecoms would do well to study its foray into cable investments.
Anyone making this statement would do well to realize that the loss that MSFT experienced in cable is equivalent to that person spending a $10 for lunch. While it could be an enormous expense for a bum on a street, it does not mean anything for someone who makes $100k per year after taxes. Alex
----- Original Message ----- From: <alex@yuriev.com> To: "Bradley Dunn" <bradley@dunn.org> Cc: "Scott Francis" <darkuncle@darkuncle.net>; <nanog@merit.edu> Sent: Friday, July 12, 2002 10:58 AM Subject: Re: Buffett bailout of WorldCom raises questions of influence
Anyone making this statement would do well to realize that the loss that MSFT experienced in cable is equivalent to that person spending a $10 for lunch. While it could be an enormous expense for a bum on a street, it does not mean anything for someone who makes $100k per year after taxes.
My copy of Microsoft's Q1FY2002 earnings statement has an after-tax writeoff of $1.24 billion for investment losses, largely in cable, which reduced earnings per share from 43 cents to 23 cents. Expensive lunch indeed. But what's a few orders of magnitude on NANOG? The monetary loss wasn't the point anyway. The point was Microsoft's track record when venturing outside its core business is mixed at best. (The jury's still out on the Xbox.) Bradley
On Fri, Jul 12, 2002 at 11:28:15AM -0400, Bradley Dunn wrote:
Anyone who fears a Microsoft entry into telecoms would do well to study its foray into cable investments.
They made our life at RoadRunner rather difficult. -j
I'm wondering if Level(3) is going to make a play. Buffet et. al. just put 500MM in cash into convertible bonds for "acquisitions" and I believe Level 3 has a substanital amount of cash on the sidelines anyhow. I know from working at Level 3 that it would be a sweet victory for many if Level 3 acquired Worldcomm out of bankruptcy. Ebbers is gone. All the old exec staff is gone. Sidgemore and Cerf get along with Jim Crowe as far as I know <i dont really>, but I do know the Ebbers and Crowe were not pals since it was a reason that Crowe and the troops left Worldcom. Jim Crowe and Buffet are friends, and the original investors in L3 include, IIRC, Bill Gates as well as a few other super billionaires. It could be interesting. At 07:22 AM 7/12/2002 -0700, Scott Francis wrote:
http://www.usatoday.com/money/columns/maney.htm
An interesting history, especially for those of us (like myself) that didn't experience it first-hand. I've often wondered what would happen if MSFT gained control (in name or in fact) of any significant piece of the backbone ... -- -= Scott Francis || darkuncle (at) darkuncle (dot) net =- GPG key CB33CCA7 has been revoked; I am now 5537F527 illum oportet crescere me autem minui
Regards, -- Martin Hannigan hannigan@fugawi.net
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Scott Francis