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Cincinnati Bell Inc. Message Board

  • b_zerkley b_zerkley Nov 19, 1998 12:49 PM Flag

    For what it's worth

    My investment banking kid says that without a
    break in the market, CVG should be in the low to mid
    20's 6 months after the spin off. Says that they are
    making all the right moves, but also says they could
    have a negative profit blip as they account for
    certain consolidation costs. Overall he's

    On CSN, he says that he see's upper teens in 6
    months, depending on how aggressive CSN management
    refocuses their attention. A buy out of CSN could be a
    possibility with CVG on it's own. He's a punk, but he got me
    into CVG at $12 and CSN at 27 (avg) two months ago, so
    I'm listening.

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    • I was both "pleased and relieved" to see that the
      company finally decided on announcing the spin-off date
      and the ratio that each shareholder would get from
      their "unsolicited and unconsulted decision." While I
      personally believe that "each shareholder" has received
      about 2/3 in value what they are entitled to, it is a
      lot better than the "alleged 1/10 of one share that
      some people on this board were willing to accept at
      the time the spin-off was announced."

      appreciate your willingness to share an opinion but lets
      stick to the facts with this company, not opinion. For
      example the CVG people should not have any "consolidation
      costs" period. If they do then they have a "real
      problem." All the assets CVG has,ultimately came from your
      owning CSN. They were both one and the same. CSN bought
      all the buildings, equipment, paid salaries, and
      hired people with "your money." From August to December
      1998, they have had the "play or use of your money" and
      you need to know that. In addition, they received IPO
      funding totaling many millions of dollars. To calculate
      that look at the total number of shares sold and use
      an average price for the period and you can come
      reasonably close to the "real truth." The original IPO price
      for this stock had to be lowered because the managers
      chose an "innopurtune" time to announce the IPO, which
      has lowered it value. I believe the IPO price was
      from 5 to 7 dollars lower than the initial target and
      CVG has shown very little increase in value because I
      believe and sense it has weak management. I hope I am
      wrong, I will wait awhile and not make a "snap decsion"
      but I know that the CEO of CVG sold a large amount of
      CSN close to $2M in options. (You can verify this by
      going to the EDGAR data base) This ought to "make you
      think a little" about judgement."

      The next
      thing you might want to consider is what would the
      whole shooting match be worth if you had : (1) phone
      company, (2) CBIS, (3) MATRIXX Marketing, (4) Cincinnati
      Bell Wireless, and (5) satellite TV. Probabaly a lot
      more than the current 29 and 16. It might be a 60 to
      70 dollar stock. The reason for the break-up
      according to management was Wall Street did not know how to
      value a phone company and the communications/billing
      services. So how can it now value CSN with the wireless and
      the satellite.
      Somehow, it will and I believe the
      value will be very high mid 30's to low 40's soon.
      Which leads me to only one conclusion, if you can
      spin-off CSN 1 for 1 with a share of CVG, how is it that
      Wall Street could not do it. I believe that was a
      "cover story" to get executive compensation for 2 CEO's
      and boards which dillutes the value of both CVG and
      CSN. CVG accounted for 75% of the revenues of CSN,
      despite its "weak managers" who have been overcompensated
      and have "unjustly enriched themselves" at your
      expense. Buy something like E-BAY or AOL I did and you
      might feel better.

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