PSIX

PROFILED 12-01-00 AT $1.25

90 DAY TARGET ALERT OF $5.18

MOMENTUM MEMBERS:

We agree with analysts who believe that the bandwidth-hungry applications only dreamed about a few years ago are finally arriving, meaning communications carriers that have built excessive network capacity at great costs may not look foolish for long.

Ther are several companies that have already assumed enormous debt in order to lay the groundwork for the Future Digital Economy, particularly PSINet... This debt was the price for building up a state-of-the-art InfraStructure...And now PSIX is sitting on a Goldmine... The question is whether the bandwidth market realities will converge quickly enough for the company to be able to benefit from its efforts, or whether the risk the company took in buying and building so aggressively will knock it out of the game before it gets the chance.

One of the main factors that separates PSIX from the rest, is their very substantial cash position...their usage capacity continues to skyrocket, but there is a real threat that it won't come fast enough or at a price point that allows the companies to show positive operating cash flow and service their debts... However, PSIX has maintained a strong cash position and has recognized that their explosive growth must be adjusted downward in the current economy.

PSIX has established a Global Network that has incredible future earnings potential and is the Envy of most of the Tele-com giants...and some cash-rich companies out there are primed to take advantage of PSINets current over expanded condition.

PSINet offers Net access, Web hosting, e-commerce transactions and other Internet services in 900 cities and 28 countries worldwide. Company executives believe their fiber-optic and data center hosting properties are among the company's most valuable assets.

"PSINet has built a very valuable company over the years, and we have little doubt that the company could find buyers for its assets," Wasserstein Perella analyst William Klein wrote in a research report. "We have no doubt that the bidders' list would be very long."

Bandwidth boom to benefit surviving telecoms

A recently released a report predicting a 300-fold increase in demand for network bandwidth in the next eight to 10 years. Another prominent researcher, Boston-based Adventis (formerly Renaissance Strategy) is also changing its tune, proclaiming in an upcoming report that high-speed connections to the Net will drive demand for more capacity among network operators.

"The outlook really is very, very good," said Tracey Vanik, technical director for RHK. "We don't see any reason to suspect we're at the top of the (growth) curve. We're at the bottom of the slope."

PSINet is one of the world's largest and most experienced providers of IP-based communications services for business. We offer a complete range of Internet solutions that can help you cut costs, boost productivity, expand into new markets, and improve the way you work.

Our services include:

Corporate Internet access and private IP networks

Managed Internet security

Web and database hosting services

Electronic commerce solutions

Voice, fax, live audio-video, and other applications

PSINet also makes it easy for your business to use the Internet efficiently and economically with 24x7 network operations and monitoring, outstanding customer support, and free IP tutorials.

PSINet delivers this full line of services to small and medium-sized businesses as well as a quarter of the Fortune 500. Our customers also include government agencies, educational institutions, and information services companies.

PSINet operates one of the industry's largest and most advance fast-packet Internet access networks. PSINet is the only independent facilities-based ISP in the world, which enables us to act quickly and flexibly to deploy new services on behalf of our customers.

Headquartered in suburban Washington, D.C., PSINet is a major presence in the international Internet community, with more than 800 points-of-presence and operations in United States, Canada, Europe, Latin America and Asia.

Our Network

One of the most important things to know about PSINet is that we engineered our network specifically for Internet applications, resulting in an infrastructure optimized for Internet performance. It's the salient feature of our service, setting us apart from telephone companies, systems integrators, and the dozens of ISPs you see advertised in the back of your local business section.

When we set out to build our network, we drew on years of experience in pioneering the standards and technologies that became the modern Internet. Using the same creativity they used to establish the Internet, our engineers projected ahead, imagining what sorts of applications would be running over the Internet in decades hence.

The logical conclusion was that our network needed to be Internet-optimized consciously and specifically designed to accommodate IP-based applications such as Internet telephony, electronic commerce, and desktop videoconferencing. In 1992, we began to build a switching fabric (at the time consisting of frame relay technology) that provided a scalable infrastructure on which we built an IP architecture with performance and reliability standards not obtainable by any other ISP.

Today, with more than 800 points-of-presence (POPs) worldwide, our network remains a standard for technical excellence. PSINet also maintains a 24 x 7 Network Operations Center to continually monitor the performance of our system. As the primary nerve center of the PSINet backbone, the NOC assures our customers that their service will be there when they need it.

There is a difference among Internet service providers. The advanced capabilities of PSINet's Internet-optimized global network are a critical part of that difference.

THE FUTURE IS NOW... IN 2001.

Momentum Traders Network believes high-speed connections and worldwide growth in Net use will drive an expansion of network capacity and result in opportunities for agile network operators, See the recent announcement from Sprint that it would hike capital spending to more than $6 billion next year, from $5 billion in 2000, to keep up with demand.

Momentum Traders Network also estimates that worldwide users of the Net will more than double by July of next year, from 380 million today to 800 million. As an example, We found that subscribers to the Net in China are growing by 2 million per month.

The studies are good news for equipment makers such as Nortel Networks, Cisco Systems, Lucent Technologies and Ciena, and ofcourse PSINet among others, which can only benefit from continued capacity demand despite a current climate of Wall Street skepticism.

"It reaffirms our belief on the impact of the Internet," said Don Smith, president of optical Internet solutions at Nortel. "From an industry perspective, I think it's important for all of us to get our hands around this."

A third study from Infonetics Research, out Monday, predicts that spending among large nationwide telecommunications carriers will grow 220 percent, from $13.3 billion this year to $42.5 billion in 2004, further bolstering the notion that capacity demand will continue as operators scramble to keep up with the latest technology.

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