XO Communications: Open Letter to Carl Icahn from a Minority Shareholder

Jun. 16, 2008 10:39 AM ETXO Holdings, Inc. (XOCM)3 Comments
Edward Johnson profile picture
Edward Johnson
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Dear Mr. Icahn,

I’m writing this letter to you as a concerned minority shareholder of XO Communications (XOHO.OB) and to let you know that you have a unique opportunity to a) prove you are a true shareholders' activist, b) make several billion dollars, and c) debunk rumors that you don’t know how to run a business.

How can you accomplish this?

  1. First, remove the person managing the XO account and take control of the account yourself. I assume the person currently handling the account is not you because this person has driven the company into financial distress and destroyed shareholder value. While XO once traded at over $8 it’s currently trading at $.75. That’s right 75 cents. Surely a true shareholders activist such as yourself would never do such a thing. I also believe this person’s reckless actions have exposed XO to future legal action and uncertainty at a time when XO’s services are in great demand. As I’m sure you are aware these actions have already led to one shareholder lawsuit and the threat of more if XO continues on its current course.
  2. Second, spend some time getting to know XO and its full potential as a going concern based on current market conditions. Note that XO’s core IP and data services are growing 30% annually and its total core services are growing 18.6% annually. XO’s total revenue has been relatively flat over the last two years but that’s because XO shifted its focus from legacy services to IP based services. Revenue should start to accelerate now as the percentage of legacy revenue decreases and core IP based revenue increases. Also note that XO is one of the largest holders of LMDS licenses. This spectrum has huge potential as both a substitute for the last mile as well as backhaul for cell sites. As wireless

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