controversial valuation, page-9

First, a quirky google-proof link from another jaundiced journalist:

http://thewest.com.au/20030716/business/tw-business-home-sto61293.html


The recent long-haul fibre fiascos had a common problem involving spending ~$100m's and laying thousands of kms before any return. Very risky.

By contrast UEC's metro network ~involves 100 20km links. They can easily temporarily buy rather than build poorly penetrated ones. And failure of one link (say through a customer renege) only risks ~1%. Easy to risk manage.

My guess is all of UEC's possible risks are now behind them. And prefer my valuation with ZERO risk discount.

I focus on key factors such as future sales and EBITDA and rate my interest low about interest rates and other distractions.

Perhaps financiers don't understand the different risk profile between UEC's network versus one spanning the Nullarbor.

Perhaps in a few days UEC will demonstrate they are making the numbers, and that ignorance will dissipate. And UEC could refinance, much to the obvious chagrin of their usurious dominant shareholder/financier.