For Adelphia Communications (ADLAE) , it's all coming down to a game of Beat the Clock.

The cable TV system operator, which has wowed Wall Street for years with its ability to balance a heavy debt load, made clear Thursday that it has precious little time to clean up its act. Still, investors were of mixed views on what the company's comments really meant for the stock.

In a preopen press release, Adelphia said it could be in default on its credit agreements, a key source of borrowings for the company, if it isn't able to get financial statements to creditors by the end of the month. For some of the borrowings, the deadline falls within two weeks.

Underlining just how open the matter is to interpretation, Adelphia stock plunged before trading opened on release of the company's statement, but recovered to gain as much as 5% in early trading before slipping again into the red. Around midday the stock was down 25 cents, or 3.6%, at $6.70. And investors in the Adelphia situation had vastly diverging views on the news, ranging from Adelphia is basically in the clear to another shoe is due to drop any time now.

Winding Road

Adelphia, which shocked Wall Street last month with the disclosure of $2.3 billion in potential liabilities that weren't on its books, still hasn't filed its 2001 annual report, due originally March 30. On Thursday, the company said it still doesn't know when it will file the 10-K.

Thursday's announcement, in which Adelphia said it might not be able to make further borrowings under its key credit agreements, hints that the company's current debt-and-financial-reporting morass could mean the whole balancing act could come tumbling down. If Adelphia isn't able to get its audited 2001 financial statements and related paperwork to lenders by deadline time later this month, or if the company can't get any necessary extensions, the relevant lenders, says Adelphia, would be entitled to exercise "other creditors' remedies."

That sounds ominous. Or it does, at least, to many on Wall Street. Since this financial mess exploded publicly on March 27, Adelphia's shares have fallen from north of $20 to as low as $5.24.

Or maybe the problem was that while Adelphia did appear to settle some of the uncertainty surrounding its off balance sheet liabilities, those details weren't enough calm everyone's qualms about the cable company controlled by the Rigas family of Coudersport, Pa.

What We Know

Here's something we do know: Adelphia says it has tentatively concluded that it should bring some of the aforementioned surprise potential liabilities onto its balance sheet. These liabilities stem from co-borrowing arrangements the company has with separate entities owned by the Rigas family -- deals in which Adelphia is responsible for paying back the Rigas family's borrowings if the Rigases themselves can't pay up.

Of the $2.3 billion that the Rigas entities owed under the co-borrowing arrangements as of Dec. 31, Adelphia says it will list $1.6 billion of liabilities on its own balance sheet. This money borrowed by the Rigases but ultimately backstopped by Adelphia, according to Adelphia, was used primarily to purchase Adelphia shares.

(When that borrowing-from-Peter-to-buy-stock-in-Peter's-company relationship became apparent, in recent weeks, investors, once heartened by the Rigases' continuing investments in Adelphia, began to be more skeptical about the significance of the Rigases' Adelphia-backed votes of confidence in Adelphia.) Adelphia's liabilities will be similarly restated in 1999 and2000 to add $700 million and $1.2 billion, respectively.

What We Don't

"That's wonderful news," says one buy-sider who is long Adelphia. "One reason the stock went down so far is people were afraid there was more behind the story than what was being disclosed. Now, what they're saying, basically, is the problems are limited to the co-borrowing agreements, and they've defined the amount. And they've said, 'This here is the only issue, and here's how much it is.' "

Says the buy-sider, who like other sources inthis story spoke on condition of anonymity, "In my mind, that takes a huge cloud of uncertainty off the company's finances. I honestly can't believe that it's not up to 10 bucks already."

Other people can. Another buy-sider with no current position in Adelphia says the biggest concern now is how post-Dec. 31 transactions -- ones in which the Rigases invested hundreds of millions more in Adelphia, presumably with additional money coming from the co-borrowing arrangements -- will affect its relations with lenders. "We know there's more debt coming on," says the buy-sider. "The question is, what is it? What are the implications?"

Paper Cuts

More differences of opinion revolve around whether Adelphia will indeed file its paperwork in time to avoid incurring the wrath of its lenders. Sure they will, says the Adelphia long, who happens to be a CPA. "Because now they've resolved the issue down to this co-borrowing agreement, and they've even told us what the amount is," says the CPA. "The amount of actual audit work that needs to be done to restate the financials is relatively minor."

Not so fast, says a third buy-sider, one who is short Adelphia and other cable stocks. "I think there's a decent risk of it," says the money manager, quoting a carefully crafted sentence from Adelphia's Thursday release: " 'The Company intends to issue a press release indicating its anticipated timing for filing its Form 10-K as soon as practicable.' "

"What a joke," says the money manager. "They're saying, 'As soon as possible, we'll issue a press release when we have a freaking clue of when we're going to file this thing.' "

Perhaps of greater import, the short-seller points out that another point left unaddressed by Adelphia was its mid-April disclosure that it would re-evaluate the financial guidance for 2002 in March. "If there isn't a bigger problem, why is their guidance changing?" asks the money manager, suggesting that the current mess will put the brakes on future growth.

Speculating that Adelphia's lenders will put the company on a tight leash to avoid looking like patsies, the buy-sider comments, "That, to me, says

Adelphia is under great pressure to minimize draws on their bank facility. Which probably means they can't fund the

capital expenditures they would like to fund. Which probably means they're pulling back on pushing digital and laying new physical plant."