PSINet Dreamers Awake to a Brutal Reality

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PSINet Says 'Likely' Common Stock Will 'Have No Value.'

And with that brief headline, one of the bigger games of charade comes to an end. For weeks now, PSINet (PSIX Quote) has acted as if its common stock represented a terrific call on the enterprise value of this debt machine. I know it. Ever since Motley Fool wrote the stock up and boosted it to $4, betting that it was an interesting spec, I have been sounding alarms, warning people to sell this dog cause it would never hunt again.

In the message-board cesspool, the PSINet dreamers roundly criticized me for being short the stock. I found the charge hysterically funny because I am strictly forbidden from shorting any stock. The possibility that I actually wanted people to sell because I knew the common was a worthless piece of garbage meant nothing to these mindless cheerleaders.

The fact that I had lost every time I ever bought this kind of junk also meant nothing. The idea that I wrote negatively because I actually knew you could take some money out of this tub of goo before it was too late (unlike the Fool, which never met a tech stock it wanted you to sell once you bought it) marked me as a serious war criminal in the eyes of those who never seem to get what is happening in these terrible markets.

That doesn't absolve PSINet though. It could have issued this statement months ago before more people lost hundreds of millions of dollars believing that this company had a plan to repay $4 billion in debt. It didn't. It had nothing. So what happens now? Some other company buys the assets in bankruptcy. Anybody who owns the common stock gets nothing.

And the cheerleaders move on to another stock, maybe Winstar (WCII Quote) or Teligent(TGNT Quote). Oh, and so do I.