re: Marconi: The Deal Is Done<what being="" for="" is="" like="" price="" saved="" that="" the=""> What the price is depends on who/what you are. For shareholders it amounts to losing your investment.</what>
re: Marconi: The Deal Is DoneWhat is the price for being saved like that? Surely there must be some substantial negative effects, otherwise many more companies would declare bankrupcy?
Does it just hurt their pride? Does it affect their future financial terms?
re: Marconi: The Deal Is Done The alternatives for the creditors of any company in this position is to see their asset go for pennies on the dollar of their secured investment (loans or bonds) - or worse, micropennies in a bankruptcy/liquidation proceeding. Re-capitalizing the company and redistributing the equity in exchange for control of the asset and at least a shot of making it big again someday is often preferable to a winding up, especially if there really is a viable business if its debt burden could be substantially mitigated.
In public companies it's usually the existing common shareholders that lose out the most, their investment is often diluted out of existence, or close to it. A common public shareholding in a company is not secured against the asset (i.e. as a common shareholder you line up behind the banks and other secured creditors if things go bad ... guess how much you are going to see back on your investment after the big guys are done?).
See XO communications for a similar story in the U.S.
Who loses? The existing investors in a company, the management team (often .. although not always), and just as importantly the employees .... it's not a pleasant environment to work in during such a re-organization, any company stock investments that can't be touched in 401K's or elsewhere turn to dust and such changes are often accompanied by the inevitable downsizing.
re: Marconi: The Deal Is DoneHe obviously was using the same logic as he did with MRV and its various spinoffs... No matter how badly you run company, there is no way but up (in 2000).
re: Marconi: The Deal Is DoneWe just witness the power transfer and power consolidation from the Telecom to Banks. It is a sad day for Telecom. We will see more of dollar (shilling) driven short term interests in this suppose to be National interests and long term investment area. Weep for all of us. It starts a new era indeed.
re: Marconi: The Deal Is DoneI assume you are talking about Fujitsu (FUJI). I doubt very strongly that the largest provider of SONET equipment for the RBOCs is leaving the US market. They are experiencing the same CAPEX spending issues as Nortel, Lucent, etc.
re: Marconi: The Deal Is DoneThey only have about 1500 employees in the US selling and supporting this SONET base. That's a lot less overhead than their competitors. The mother company in Japan is a $20B - $30B conglomerate that is not solely supported by the telecom community.
What the price is depends on who/what you are. For shareholders it amounts to losing your investment.</what>