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

I've been watching the high volume of trading in GXN and don't really understand why the price doesn't seem to move up or down. Can anyone explain?

Thanks

CHEERS JULES FOR THE WAKE UP CALL. AT THIS MOMENT IN MY LIFE I HAVE SOME SPARE CASH HANGING ABOUT AND INSTEAD OF THROWING FAIRLY WILD PARTIES AND GENERALLY MISBEHAVING I THOUGHT I WOULD TRY AND DO SOMETHING CONSTRUCTIVE. SO I SUBSCRIBED TO SHARES MAG SPOKE TO ONE OR TWO FRIENDS WHO TRADE REGULARLY AND HERE I AM. THROWING MONEY LEFT RIGHT AND CENTRE INTO THE UNKNOWN HOPING FOR SOME BIG RETURNS...............CERTAINLY NOT THE WAY TO GO ABOUT "INVESTING" BUT I AM HAVING FUN AND LEARNING ALONG THE WAY. I AM DEVELOPING A STRONG INTERST IN THE MARKET AND AM INTRIGUED BY THE WAY IN WHICH IT WORKS. THANKS AGAIN JULES FOR THE ENLIGHTENMENT.

DannyC..stick to it, and just learn and read up and do fantasy trades that how I learn't...had no courses, learn to love trading like u would ur girlfreind...(ok that was a joke...haha...can't compare..lol...lol..)

seriously though search the internet a lot can be learn't...sometimes I do speculate but so do a lot of other ttraders I'm sure.(which u can also term as gambling...but not without some prior reearch and digging otherwise ur mad...takes time but thats the way to may bucks...)nothing comes free and on a plate...wish it did..hopefully one day...)

Enjoy..
Jules99.

The large sales seem to be compensated by the volume of small investor sales.......Hence implying that the market maker is making the market at the correct price.

Had the institutional trades not gone through then today may have been a different story. Either way it's encouraging that this share's liquidity is improving.

.....Just my thoughts

SNR G spot on. If one does research on this company they will find that the instiutions first got in at around 2.7p and who can blame them for taking a profit after 3 years of hell.

The fact is now that these boys are now out of stock at that price and are now on the next wrung of the ladder at 4.75p with cost added on therefore about 5p.

So when will the next big selling phase come. My bet is at about 10p we should see the big boys selling again.

Up untill then and after its all blue skys.
GF.

what about Co directors off loading for Institutions to purchse possibly??

You see that sometimes, may find out later on...

Whatever the case, The good news is GXN are on the rise this morning...

The 'Buying season' has just started..


6 - 6.5P = +4.19%

cheers to Goldfinger

Jules99

took on board a few last night for mid term.....by the looks of the buys this am not a moment too soon, wasnt sure about the prospects to be honest but further research twisted my arm
Good luck!

Did you look at CSV jules?

Up over 8% already this morning :-)

Thanks Goldfinger

Yup Guys, the dam wall as broken at last and we should see some action now.

Gone in for wharehouse load this morning after my shed load yesterday.

May even go in for a hanger load this afternoon.

GF

ps, just car clinics is another one to get in before 15th when results are out.

Plenty still left in it please check it out and DYOR.

MOTION MEDIA FANS BETTER STEP ASIDE...THERE'S A NEW KID IN TOWN AND HIS NAME IS


GXN...



Good luck to all...

Still a buy at 6.75??? Not sure whether it's too late to pile in here?
What are your thoughts for over the next few of weeks - short term target? When are the results due out? Thanks you guys!

Results mid september.................

Cheers - Sell NMS and buy GXN at 6.75?? Any thoughts?

And a nice spread for a share with great potential!....:)
In 1st thing this morning...
Good Luck to all holding

JUST BOUGHT MORE...

MM'S realized huge demand on way soon....extended settlemnt was offered at 7.25p..!

:-)

Bought more late Friday afternoon and glad I did.

Yet another tipping the stock. From todays Sunday Business.


The acquisitive telecoms network operator GX Networks (GXN) is accelerating its role as an industry consolidatorwith another deal to buy capacity. Leeds based Firstnet Services, aquired for 4.3m, is the fifth network business bought since flotation three years ago - all at arguably knock-down prices- taking its customer base from 600 in December 2001 to more than 20,000 today.
Firstnet Services provides hosting, leased lines and connectivity services to small business customers. In the year to end August 2002, turnover was 7.4m and earnings before interest, tax and depreciation were 1.1m.
The deal was accompanied by a 12m share placing at 4.75p, taking the group's cash position to more than 15m - a huge war chest to fund acquisitions. In July, GX, formrly known as Zipcom, bought two telecoms businesses with sales of 11m, for 1m in shares.
The company now independantly owns and operates one of the most extensive national networks with data-centres in London, Manchester and Leeds.
GX said the takeovers are the beginning of "a structured programme to grow significantly over the next year". Now the challenge is to report profits from the expanding empire. If that is achieved, the shares could offer significant upside.
GX should benefit by being the consolidator of companies that have spent massive amounts on networks, funded when equity capital was cheap. The asset base - Firstnet, for example, has net assets valued at 4m - will limit the amount the group needs to spend on capital investment. And judging by the recent share placing by Collins Stewart, chairman and chief executive Grahame Purvis is having no trouble tapping the City for more cash when he requires.
Rationalisation, following the acquisition of Transigent last year was said to have achieved an annualised 7m of benefits. With the addition of Firstnet's sales, annualised group turnover should be more than 35m and operating profitability should come in the current year, though it is too soon to be making forecasts.
Further acquisitions look likely. All this good news has not been lost on the market which has marked the shares up - but they are still a long way below their previous highs, and GX Networks is a different animal with a more plausible story. Its prospects are probably better than at any time during its short history. Buy.

From Andrew Griffiths - The Business

gf.

Phenominal interest in this stock this morning, over 4 mil traded so far, 100% buys. Price to buy remains steady at .07

Goldfinger....or anyone
help me out here
at risk of sounding like some sort of retard........
How can so much buying take place in a single stock and the price not move an inch?

Baffled from north london!