If the Barron's article is the cause of the sell off, why is it just happening today? Whatever the cause, looks like another one of those buying opportunities to me.
September 7, 2000
Dow Jones Newswires
Winstar Dn 11%; Analyst Cites Barron's Lucent Story
Dow Jones Newswires
By John Shipman
Of DOW JONES NEWSWIRES
NEW YORK -- Shares of Winstar Communications Inc. (WCII) fell to a 52-week low Thursday, and an analyst thinks a recent Barron's story has made investors skittish.
Credit Lyonnais Securities' Rick Grubbs said a Barron's story, which said that Lucent Technologies Inc. (LU) is trying to sell loans it made to Winstar for the purchase of equipment, is contributing to the stock's selloff.
"I think it's really due to some incorrect assumptions about Winstar's financial liquidity," Grubbs said, in attributing the stock's decline to the Barron's story.
Barron's said that Lucent was offering to sell its loans to Winstar at a discount, which sent Winstar's junk bonds lower, thus increasing the cost of any financing Winstar may do in the future.
Grubbs reiterated his "buy" investment rating for Winstar Wednesday, mainly on the heels of the Worldcom Inc. (WCOM) merger with Intermedia Communications Inc. (ICIX), and he said he's comfortable with the company's cash position.
"The funding situation is solid and there's plenty of liquidity," he said.
"Their cash is very sufficient to get them through next year," Grubbs added.
Winstar's shares were recently down $2.69, or 10.7%, to $22.38 on volume of nearly 5 million shares, compared with average daily volume of about 1.3 million. Shares have traded as low as $21.38, eclipsing the previous 52-week low of $24 set last October.
Company officials weren't immediately available for comment. |
