Competitive service provider XO Holdings (news, filings) may be shrinking its workforce this summer, but they’re still adding products to the mix. Today they announced the addition of VPLS to the XO Ethernet Services portfolio. XO’s VPLS service will be sold to enterprises seeking to turn isolated local area networks into larger wide area networks in a cost effective manner.
The layer two service also includes four classes of service: Real Time, Critical, Priority and Standard, and the whole product of course comes with robust SLAs. Honestly though, I didn’t realize that XO didn’t yet have a VPLS service offering. Better late than never I guess, and Ethernet is having a great year thus far.
I’m still waiting to see XO do something beyond its recent restructuring. By their own admission, the company needs more funding to do what it needs to do to move forward. And yet the complicated dance between Icahn and minority investors seems to be no closer to a conclusion. The Icahn-controlled board refuses to consider issuing high yield debt, while several lawsuits from minority investors over previous financings are at various stages in development – making it rather awkward for Icahn to invest more of his own money. That’s the real backdrop behind the layoffs earlier this month – buying time by curbing cash burn slightly in lieu of a real resolution to their financing drama.
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Categories: CLEC · Ethernet · Financials
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This is the endgame for XO, Icahn, and minority shareholders: low cash, operational issues, litigation, litigation, litigation. The writing is on the wall and something is going to happen real soon. The most likely scenario is yet another offer from Icahn… this time at a price exhausted minority shareholders will actually agree to. Once minority shareholders are dispatched, Icahn will clean house, recapitalize the company, and put it up for sale.
Anon – agree, except that the “exhausted” minority shareholders are burrowed in and making it hard for Icahn to simply re-issue another measly offer of the kind that even his “independent” directors were unable to countenance last time. So Icahn’s options are getting limited also.
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