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Technology Stocks : PSIX up 26.5%, Takeover(?)
PSIX 59.46-2.7%Dec 5 9:30 AM EST
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To: Chris Alexander who wrote (169)6/10/1996 10:07:00 PM
From: Daniel Fisher   of 5650
 
Maybe I'm missing something but is the MCI/BT deal good news?

In fairness the stock was up today, but here are some pieces out of the Wall Street Journal on the story:

1. The two companies are doing it with $200 Million...

"While the partners won't comment officially on the size of
their investment, people who have seen the plan said
MCI and BT have each invested tens of millions of
dollars in modernizing their data networks to handle such
traffic, and will likely invest an initial $200 million or so
toward the new expansion."

2. The two companies have more muscle than the "independents"...

"Still, their service expansion should put MCI-BT out in
front of the effort by the telecom giants to wrest the
rapidly growing Internet market from smaller players.
Until a year ago, companies selling high-speed access to
the Internet to businesses were independent specialists
such as UUNet Technologies Inc. and PSINet Inc.

Each has aggressively expanded its overseas operations,
but analysts note the Internet companies' marketing and
customer relationships aren't as deep as those of the
phone companies."

I don't know why it went up on this news, honestly does this sound so good? Two companies who again have decided to build out themselves rather than buy PSIX... and doing for a lot less money.

Sounds like some deep pockets they have to compete with.

Good luck PSIXers!
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