What should we expect from COVD going forward? Opinion
(This is something I posted tonight on another board, in answering an individual who expects a "Bloody Tomorrow.")
Mike
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If you just do any basic research on where Covad stands right now, you'll understand that this is NOT really the time to worry about a "bloody tomorrow."
As I'm concerned, I'm very happy with the visible (to those of us that do a good DD) progress COVD is making in implementing their business plan. Any transition from the an old to a new technology is not easy, and it doesn't happen overnight, but as far I'm concerned I'm very pleased with the latest developments. Tell you the truth, in the area of applications such as VoIP, I expected a lot worse (and I was still willing to keep my investment here).
Talking about a "bloody tomorrow," if my shares will be with a copper lines phone company (that still doesn't understand that it's time for a change -not many of them left), yes, I would be very worry about a bloody "tomorrow." Not here, IMO!
From the latest PR's (and other sources of public info - plenty of them out there), it's quite clear to me not only the FCC and say Baby Bells understand that high speed is the way to go (e.g., up to 1 thousand times higher speed than that through the phone lines), but:
(1) As of late, actually the FCC has created some stability for companies such as COVD in their latest "UNE rules." These rules affirm the need for continued access to loops and endorse facilities-based competition - which is exactly what Covad is doing.
(2) As I understand it, COVD has invested a lot of money to build a broadband network and use the Bell network only to supplement their own facilities. Once this investment starts showing up the return (it shouldn't be too long, IMO), this alone will round up COVD's finances quite nicely.
3. What I was referring to in my previous Msgs (I should have been a bit more explicit) vs the FCC, is what probably most of you understood in the context: the FCC should be using lighter regulation for VoIP (VoWi-Fi, VoWiMAX) applications. Otherwise, in a global economy, the oversee companies will fill the gap.
4. It is very clear to me that COVD is making good progress in convincing the FCC on such things as access to line sharing and fiber.
5. As you sure already know, Covad has started to negotiate commercial agreements with the Bells, and from what I understand have already cut deals on line sharing.
All the above tell me that (at this point in time) my investment here is as secure as it can be. Don't take my word for it. Do your own DD, but do it well. This company, IMO will start its move very soon. At this point in time it's as devalued, IMO, as it can go, so any downward movement (from this point forward), if any, should be minimal. At the same time the probability for a significant upward move it's better than ever, IMO.
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