Broadwing (BWNG)

[Learning2vest]

Don't subscribe to Barron's. What did they have to say about Broadwing??

Re the recent S-3 Prospectus. I'm not surprised to see the March 14 private placement shares get registered. Expect to see the same happen with the more recent private placement.

I'm thinking that getting the shares registered for sale today does not mean the current investors are going to sell them tomorrow. They may be planning to hold long, or they could flip out at any time.

The bigger question in my mind is figuring out what Huber plans to do with the cash he is raising? He had $109 mil cash at Y/E 2005 plus a fresh $75 mil credit facility. The two recent private placements added $70 mil and $34 million. That means he has $213 million cash plus a $75 million credit line.

Broadwing has been trending toward being cash flow positive, so there must be something new coming. Something that requires a big chunk of cash. Anybody want to venture a guess as to what that might be?

My short list of guesses:

1) Down payment on the acquistion of a European partner

2) Fund a "restart" of the Corvis equipment division

3) Capex to acquire or build more local fiber in the U.S.