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Cable and Wireless plc (CWP) Message Board

  • gardner5555 gardner5555 Oct 17, 2003 3:43 PM Flag

    US data center selling prices up.

    FYI,

    I hope CW does not sell its US bus as the bottom passes.


    1. CARRIERHOTELS.COM HEADLINES

    Data Center Auctions Gain Traction (Oct. 17)
    WorldCom sales fetch strong prices through competitive bidding
    http://go.reachmail.biz/go.asp?tid=6123&eid=1549&sb_id=20119,20119

    Gardner555

    PS Nobody ever replied to my question of why it would or would not be better to buy the data centers from landlords in US, rather than pay $800 million for someone to take over US business.

    I am still waiting.

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    • >>>> PS Nobody ever replied to my question of why it would or would not be better to buy the data centers from landlords in US, rather than pay $800 million for someone to take over US business. <<<<

      If you owned a datacenter that would bring $20M in a very depressed market, but for which you have an ironclad lease for $10M per year for 20 years, would you sell it? For what price? Pretty much the present value of the lease I'll bet, including termination penalties. Think about it. They leased these things at the top of the market from people who got one HELL of a deal and aren't going to just sell out for peanuts.

      toes

      • 1 Reply to toes_that_twinkle
      • OK,

        Assume the following,

        According to article data center sold for 50 to 80 cents on dollar. use 50 cents.

        YOur 20 million dollar building was built for 40 million and leased for a more reasonble 4 to 5 million per year.

        Present value of those is probably about the 40 million, so buy it (yes at twice market prices) and all the other data centers.

        Heck with 800 million you could buy your way out of leases and still have a business that has tremendous potential.

        Or you could pay someone 800 million and end up with nothing.

        Gardner555

 

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