Savvis and Internap Awake From a Long Slumber (IIP, SVVS)

In another bullish development for the managed hosting and IP services industry, SAVVIS, Inc (Nasdaq: SVVS, research) announced that it is appointing Jonathan C. Crane as Chairman of SAVVIS' Board of Directors effective March 29, 2006.

According to the company:

"Crane, 56, previously served as President of Strategy and Alliances at MCI where he led company growth initiatives including the strategic redirection of MCI/WorldCom and the recent merger of MCI and Verizon."

"SAVVIS is on the verge of becoming a significant global player in a rapidly expanding market for managed hosting and IT services," said Crane. "The Board is united in its belief that the company's strengthening operational and financial performance, combined with the experience and leadership that Phil Koen brings to an already strong management team, will be instrumental as we look to build SAVVIS' presence as a globally recognized leader."

How does this effect Internap Network Services Corporation (IIP)? Well, for the most part this is bullish for Internap since this is yet another indication that this entire sector is waking up from a long, long slumber. SVVS has a horrendous balance sheet, so look for the company to do some sort of restructuring of the balance sheet soon. Internap has one of the cleanest balance sheets in the industry and an excellent customer list, so as mentioned in prior posts, as the industry heats up again look for Internap to get acquired or merge with another company.

Comments

[SeekingAlpha Editors:]

Aren't the comments about a recovery in the industry just PR from the company's press release? They don't seem to be backed up by any numbers.

2006 Mar 31 01:21 AM