Savvis (SVVS) Makes Bullish Comments

In another bullish development for the managed hosting and IP Services industry, Savvis (SVVS) announced today 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 (IIP)? Well, for the most part this is bullish for Internap (IIP) 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 (IIP) 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 (IIP) to get acquired or merge with another company.

Note: We keep getting emails about our price target for Internap (IIP). For the sake of clarity, we are long-term value investors and are merely providing price targets so other like-minded investors can get a sense of the downside risk implied in a company's current stock price and then make a decision as to whether they should invest or not at current prices. Our price targets are minimal valuation scenarios, based on publicly available information. It is quite easy to throw a lofty valuation target on any stock based on pure speculation, but to do so is not prudent money management. We think investors need to pay more attention to risk, rather than return when investing, and this is precisely why our price targets may not always be in lock-step with the current stock market craze. Hopefully, our conservative targets will help readers achieve the first rule of investing: Don't Lose Money!