September 26, 2001
OK, Now What?
Exodus' Chapter 11 filing today ends months of speculation about bankruptcy. Now that all the guesswork is over, what will this event mean for our industry - for Exodus' landlords, customers, business partners and investors?
The company hasn't filled in many of the blanks. The one substantial nugget of news was the $200 million in debtor financing from GE Capital. While making a vague reference to employee reductions, Exodus said it was "about the right size" and apparently plans no dramatic steps to further reduce expenses. Is $200 million enough, especially in this market?
Some companies emerge from bankruptcy. Layer One, for example, did it earlier this summer. Can Exodus follow suit? Or is its management deluding itself in predicting a quick trip through Chapter 11, with support from creditors and bondholders?
Is this likely to become a remarkable turnaround story? Or yet another court-supervised fire sale for cents on the dollar?
We want to hear from you. Add your comments below. Let's try to keep the sales pitches to a minimum.
Posted by RichM at September 26, 2001 06:16 PMThe problem I see with Exodus is that while they possess the ability to rapidly grow revenues, their EBITDA costs seem to grow $ for $ with those revs. Merely eliminating the debt will not change this more fundamental problem. I think that bondholders will be wary of this and may be reluctant to go forward.
Posted by: B Shaw at September 27, 2001 11:03 AMIt can't happen. Who in their right mind buy a company that has so many financial problems? I've work for the 800 pound gorrilla and I know that there is more than meets the eye. Reducing staff will only compund the problem - they need that staff to service the customer. As it is right now there aren't enough to go around. They have a large customer base that went with them b/c they weren't a telco and now a telco is the only thing that can save them. Those customers WILL move to a neutral provider in droves.
Posted by: Former_Exo_Staff at September 27, 2001 11:37 AMWho do you see as benefactors of Exodus exodus?
Posted by: B Shaw at September 27, 2001 02:26 PM