Briefing.com on Verizon:
Verizon (VZ) 47 3/8 +7/16: Negotiators are scrambling to end a labor strike by the company's 87,200 workers in 12 Northeastern states. The nation's largest local and wireless telecom company is in talks with two labor unions, the Communications Workers of America, which represents 72,500 Verizon workers and the International Brotherhood of Electrical Workers which represents 14,700 employees. A press conference has been scheduled for 1:00 pm EDT, and the subject has been labeled a "bargaining update," providing little insight as to the progress that has been made since the 7:00 am resumption of discussions. The general tone from company spokesmen suggests that the sides are close to an agreement, but the sides were deadlocked well into the wee hours Sunday night/Monday morning and there are reports of vandalism at company facilities and service outages affecting thousands of customers this morning. Street analysts are busy forecasting the collateral damages of the strike and the consensus seems to be that the DSL providers that rely on the Verizon network will be significantly affected if the strike continues for an extended period of time. Names mentioned include Covad (COVD), Network Access Solutions (NASC), Northpoint (NPNT) and Rhythms (RTHM). CE Unterberg Towbin says broadband service provider, Winstar Communications (WCII) is more insulated from the strike as they have a significant portion of service offerings on their own network. Frost Securities estimates that for every day that the strike continues COVD could be affected by as much as 200 lines per day, NPNT by 100 lines per day, RTHM by 60 lines per day, and NASC by 55 lines per day. However, Frost Analyst, Adam Giansiracusa, went on to say that orders for new DSL lines will continue to be taken by these companies during the strike and that those that are not provisioned on schedule, will go into backlog; and any dip in these stocks will create a buying opportunity. Bear Stearns surmises that the companies most exposed to damage from the strike are CTC Communications (CPTL), Net2000 (NTKK), Network Plus (NPLS), and NASC. Hopefully the strike will come to an end soon, and there will little peripheral damage, but the strife highlights the importance of facilities ownership as those that rely on Verizon's facilities are being held hostage by VZ's labor problems. |
