The management of this telco network company have shelled out just short of 20 million on assets worth over 400 million, amazing. Please read the following report.

Many thanks to Brian for this excelent e- mail on the company.

If it's good enough for Warren Buffett ........
Published: 07:41 Fri 29 Aug 2003
By Joanne Wallen, Associate Editor,/b>


Alternative telecoms player GX Networks is defying all odds - it has just raised a further 12 million, made another acquisition and should be profitable 'very soon' thanks to the vice chairman's cunning plan - it's also in a sector that two US billionaire investors have bought into.

Peter Dubens is vice chairman of GX and also of ukbetting, and his strategy for both is the same. He is taking advantage of what he views as a unique moment in history to create two businesses that both become the beneficiaries of the massive over investment made by young companies in the past four years.

GX (GXN) today announced that it has acquired Firstnet Services, a similar telecoms business to itself, from Minorplanet (MPS) for 4.3 million. At the same time it has raised 12 million through an institutional placing of 261.9 million shares at 4.75p.

GX Networks was a private company that Dubens bought last year, before reversing it into AIM-listed Zipcom and changing the name to GX. The company bought two businesses that were virtually bankrupt and two more since that were 'not distressed' including today's acquisition of Firstnet Services from Minorplanet.

Dubens told Citywire that in total, these businesses have had investment of a massive 400 million, fuelled by the investment money being thrown around during the dotcom bubble. The opportunity comes from acquiring the expensive technology and infrastructure that this spending frenzy paid for, while chopping out all the excess costs and creating at a fraction of the original cost a viable business.

GX is a provider of telecoms and Internet hosting services to small and medium businesses. Another valuable legacy of the halcyon days is the long-term rental type agreement it enjoys with network owner Fibernet (FIB). GX is probably the sole survivor with a 25-year (now 23 years left to run) Indefensible Right of Use (IRU) agreement with Fibernet. This agreement effectively gives GX ownership of part of the network for the duration of the IRU. GX's previous owner paid some 11 million up front for the privilege, but it was an agreement that caused strange accounting anomalies among the carriers, and Fibernet for one stopped issuing IRU's.

Dubens says the IRU gives GX far lower capital costs than any other telco, since it is not responsible for maintaining the network for the next 23 years.

The idea therefore is to get as many customers as possible using the network, hence today's acquisition and the previous purchases of Transigent last October and Telenor Business Holdings' XTML and Compulink Information eXchange in July, each of which has been primarily for the customer base. The company now has some 20,000 customers and 44 million worth of billings.

Firstnet also adds some wireless and broadband technology and significantly increases the company's hosting capacity.

There is clearly significant duplication in putting these similar businesses together – call centres, management teams and the like, and Dubens and his team have already demonstrated at Ukbetting that they can be ruthless in stripping away unnecessary costs.

So after the devastation of the past few years, is there really still a viable business for an alternative telecoms operator? 'More so than ever,' reckons Dubens. He cites ukbetting's own situation as an extensive user of telecoms, spending some 700,000 a year on communications. The online betting site has leased lines, satellite links, virtual private networks and is absolutely dependent on having a service that can handle millions of bets coming through at the same time for a major sporting event. Dubens reckons small and medium businesses need a reliable alternative to the incumbents like BT, that can offer a more personalised service to their customers.

But he would say that. A more compelling reason to believe that there will be some winners in the sector is the recent investment by two well known billionaire investors, Warren Buffett and Carl Icahn.

Buffett, the traditionally tech-averse 'Sage of Omaha' emerged with a $20 million (12.7 million) stake in US telco Level 3 in May, while Icahn, a 67-year-old billionaire, took XO Communications out of bankruptcy in January and has since launched a $700 million hostile offer for bankrupt telecom provider Global Crossing.

Shortly after announcing his offer for Global Crossing, Icahn is reported to have said: 'This is like the railroads in the 1880's.'

Dubens himself is no slouch. As well as GX and Ukbetting he is a co-founder of Avocet Capital Management, a European technology hedge fund management business.

Two UK shrewd investors to have spotted the opportunity are A-rated Roger Whiteoak, with 4 million shares in the Framlington UK Smaller Companies Acc fund and also 45 million shares or 4.59% in the Throgmorton Trust (THRA). AAA-rated Patrick Evershed holds 0.51% for the New Star Select Opportunities fund.

GX's shares are currently up 0.125p at 5.625p, valuing the business at 56.6 million. If the company can break into profit any time soon, and the hunches of Dubens, Buffet and Icahn are right, now is the time to buy. Just remember this is still a risky business, and Buffett and Icahn at least can afford to lose a few shirts.ENDS.

Indeed risky but if all things go to plan just how big will the reward be.

GF

Goldfinger. We do operate a yellow card system, Two yellow cards and a third offence means you get red carded. This means you can still access all areas of the site except Bulletin Boards. For very serious offences we ban the offender outright ,and by using email and IP tracking try and stop the user re-registering.


Mike

Mike, thats brilliant to here. Too many boards just let filthy language, ramping, de-ramping and accusations go unpunished. Theres no need for it we are all adults and should act in an adult way. Theres nothing wrong with a reasoned debate, theres always two sides to the coin.

Now hoping to put a lot more into this site as I find the posters to be very well clued up and most of all respectful.

regards GF.

Any comments on the stock guys? Marching down to 6.25 by the look of it.

Lot of activity. Volume has doubled to 4m in the last hour, the spread has tightened considerably and the bid is working its way back up to 7p.

Good stuff DC, that what we like to hear.

cheers GF.

Not sure what has caused this flurry. The price has been languishing for a week or so now. Anyone heard any news?

Whats happen to the shares in this company i still hold 375000 shares but i still think it will hit 10p mark.

I WILL BE TOPPING-UP AT THIS PRICES

as frustrating as it is, we are still all in. This is still the same company we were all raving about a month ago. They are going about business as usual, the stock price maybe falling, but if I have to leave my money in this company for another month or another year, I will see profits and quite large ones I feel - just a matter of hanging in there

Rasool, spot on mate. It pays to be patient. I first recommended ZOO on this board and others and my, did I get some stick in the first few months when it was about 6p. When it was 20p though same people were patting me on the back.
This aint gambling its investing in business and business can some times take a long time to come good , but its worth it in the end.

cheers GF.

This should help push the price northwards.......

PIPEX cleans up at Future UK Internet Awards 2003
10 November, 2003

The UK's first commercial ISP, PIPEX, now part of PIPEX Communications, has been named as 'Best Business ISP' and 'Best Consumer Broadband ISP' by Future Publishing's UK Internet Awards 2003. PIPEX was also highly commended in the 'Best Business Broadband ISP' category.

This is the third year that PIPEX has won the 'Best Business ISP' category of the prestigious Future UK Internet Awards. Voted for by over 50,000 readers, the awards comprise of 15 categories that are designed to recognise companies that excel at providing Internet services. This recognition is the latest in a long line for PIPEX. The company has already won three separate ISP awards this year. These include: Best Consumer Broadband Provider, ISPA Awards 2003; Best Business ISP, Practical Internet Awards 2003 and Best Broadband ADSL, ISP Review Awards 2003.

David Rickards, chief operating officer of PIPEX Communications comments, "We are thrilled to be recognised yet again as the UK's leading ISP in both business and consumer markets. These awards are especially meaningful because they are voted for by the end users.

We are determined to build upon this success as the newly formed PIPEX Communications by consistently delivering excellent service to our existing and new customers and providing them with additional services that will help them to get maximum benefit out of both their data and voice communications." PIPEX was acquired by telecoms network operator and provider of business broadband solutions, GX Networks Plc in October 2003 and changed its name to PIPEX Communications Plc thereafter.


gf

Shares are up nearly 4% and lots people are buying the shares i think the only way is UP UP AND UP

Lets hope so, the feeling is good regarding this company all positive news with lots more potential...

Up 7.4% now. Hopefully it'll sustain the rise until close.

Yeah, we need positive finish to the day.......

My super sonic sodar radar detects some movement....AT LAST!

How far will it go jules99, if yr super sonic radar is that good can you advise, lol :-), very quiet on these boards today....

Lets hope they reach 21p on some fantastic news tmor am...Im I dreamin?

California,,,

up up and away

Very solid "classic" bounce from the resistance level and still in a strong uptrend - should be plenty more to come!

Thanks overgrowth may even purchase some more.....