Global Crossing Down 6%; Co Has No News To Explain Slide
Monday, August 27, 2001 02:06 PM
By Bob Sechler
Of DOW JONES NEWSWIRES
AUSTIN, Texas (Dow Jones)--Global Crossing Ltd. (GX, news, msgs) shares fell to a 52-week low Monday as investors may have been reacting to negative news on Exodus Communications Inc. (EXDS, news, msgs). Global Crossing, whose shares recently were down 4.7%, has about a 20% stake in Exodus.
Kaufman Brothers analyst Vik Grover said investors might be reacting to continued troubles at Exodus, which saw its shares slide 10% Monday to 96 cents after an article in The Wall Street Journal highlighted the company's uncertain future.
Besides being partly owned by Global Crossing, Exodus is also a customer of the Bermuda telecommunications company.
But Grover said he considers the Global Crossing sell-off an overreaction, adding that Exodus isn't among the company's top customers.
In addition, Global Crossing already has said it may write off its Exodus investment.
"With or without Exodus, it doesn't break Global Crossing," Grover said. "I'm on the verge of upgrading (Global Crossing) to strong buy (from a buy). It's a very strong buying opportunity."
Global Crossing spokeswoman Kim Polan said the company hadn't released any news Monday that may have triggered the slide. She said Global Crossing never comments on its stock movement.
Shares of Global Crossing recently were down 20 cents to $4.05 on volume of 16.5 million, compared with average daily volume of 10.4 million. Earlier, shares hit a 52-week low of $3.65, dropping below the previous low mark of $4.25 on Friday. Global Crossing stock has fallen in nine consecutive sessions.
In other news Monday, former Global Crossing director David Lee filed to sell 1 million shares of the company's stock, according to a Form 144 filing with the Securities and Exchange Commission.
Lee listed Aug. 20 as the approximate sale date and valued the shares at just under $5 million.
But analysts said they doubted the news of Lee's sale was driving the share price down.
Global Crossing shares have slid about 25% over the past two weeks after the company announced that a Defense Department contract it won last month may have to be rebid because of procedural issues.
The company said the procedural issues had nothing to do with its bid, and it added that it's confident of winning the contract again. But Global Crossing officials also assured investors at the time that the loss of the work "would not have a material effect on the company's financial results" if the company doesn't win the contract after it is rebid.
Shares of other telecommunications companies also were down Monday. Broadwing Inc. (BRW, news, msgs) shares recently were down 2.6% or 51 cents at $18.74, while Quest Communications International Inc. (Q, news, msgs) shares were off 2.5% or 56 cents at $21.71.
-By Bob Sechler, Dow Jones Newswires; 512-236-9637 |
