Tulipomania Blowoff Contest: Why and When will it end? Message Board

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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end?

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Jun 26 5:00 PM EST

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To: Mad2 who wrote (3019)	8/27/2000 7:24:52 PM
From: RockyBalboa	Read Replies (1) of 3543

PAYING TOO MUCH AGAIN? A purchase price for Powertel of more than two times market capitalisation may raise renewed questions about whether Telekom is paying too much for its U.S. expansion drive. Deutsche Telekom's stock has fallen by a third since its June offering of a new tranche of shares on fears that Telekom is paying too much for VoiceStream and for UMTS third-generation mobile phone licenses in Europe. Telekom Chief Executive Ron Sommer said after the VoiceStream buy that Telekom was in the market for further acquisitions in the United States where he has pledged that in the long term, the company will be at least as large as it is now in Europe. Telekom's finance chief said during the weekend that the group's share price was ``dramatically undervalued'' and he would talk to investors in September in a campaign to boost it. Chief Financial Officer Karl-Gerhard Eick told Frankfurter Allgemeine Zeitung: ``It will be my main task in the coming weeks and months to create new confidence in the share. Instead of the usual two weeks I shall be on the road for four weeks. We will fight to raise the share price.'' He said Telekom's share price, which closed up 2.14 percent at 44.30 euros on Friday -- down from a March peak of 104 and from the 66.50 euro issue price of its June equity offering -- was dramatically undervalued at current levels. ``We evidently have not been able to explain to shareholders and investors why the high costs for the purchase of VoiceStream and of the UMTS licenses are justified,'' Eick said. He said Telekom was better positioned in the German UMTS market than many competitors and that the VoiceStream purchase had been a good investment. Eick did not say at what level he would see Telekom as fairly valued. But he pointed out that Deutsche Bank AG had set a share price target of 62 to 64 euros for the stock. Eick said Telekom would float its mobile phone activities only when the takeover of VoiceStream had been completed or when it was certain that it would be completed. Telekom announced on Aug. 9 that it was postponing the flotation of its T-Mobile cellphone unit scheduled for the autumn because its takeover of VoiceStream had made preparations for a listing more complex. biz.yahoo.com

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