A Fortuitous Moment

On July 16 of last year, a Bloomberg story reported that after heated negotiations, Global Crossing had decided not to sell its Global Center data center unit to Exodus. The issue, it seems, was valuation.

If only GX had stuck to its guns. Two months later it changed its mind, and agreed to sell Global Center to Exodus for $6.5 billion in stock. In January, the deal closed at a revised price of just $1.91 billion, reflecting a steep slide in Exodus shares.

Exodus received 11 data centers as well as 600 customers including marquee names such as Akamai, NBCi, Novell, Viacom and ZDNet.

What did Global Crossing wind up with? Zero. Zip. Nada.

On Monday, Exodus said its common stock - including the 108 million shares owned by Global Crossing - would have no value. On Tuesday Global Crossing reported a $2 billion charge to earnings to account for the disastrous deal.

Sure, hindsight is 20/20. But as Global Crossing struggles to recover and rebuild, its investors and employees should remember the day the company tried to resist the urge to merge - and ultimately couldn't.