Western Wireless Stock Off More Than 30 Percent
NEW YORK (Reuters) - Shares of Western Wireless Corp. (Nasdaq:WWCA - news) on Monday fell to a new year-low after AT&T Wireless Services Inc.'s (NYSE:AWE - news) new joint venture with Cingular Wireless fueled fears that Western Wireless would lose roaming revenue, analysts said.
Shares of Western Wireless plummeted more than 30 percent, or $4.60 at $10.62 on Nasdaq in afternoon trade. The company's shares, the second largest percentage loser on Nasdaq, are trading under its former 52-week low of $13.39.
AT&T Wireless, the nation's third-largest wireless operator, on Monday said it formed a joint venture with Cingular Wireless, the nation's second-largest wireless firm, to jointly build out a next-generation network along interstate highways in Midwest and Western states.
Analysts said investors were worried that Western Wireless, which serves those areas, would lose roaming revenue as a result. Wireless firms receive roaming revenue when a customer on another network uses their networks.
Until now, Western Wireless derived about 67 percent of its roaming revenue from AT&T Wireless. Roaming revenues comprise about 30 percent of Western Wireless' total revenues.
``People are speculating that as much as half of the 67 percent could be immediately impacted by this joint venture,'' Frank Marsala, wireless analyst with Robertson Stephens, said.
Marsala speculated that wireless operator Leap Wireless Inc.'s (Nasdaq:LWIN - news) stock was also being pulled down for the same reason, although he added that Leap should not be affected by the joint venture.
``My impression is that Leap is becoming part of the speculation as well. They're trying to raise the question, 'Who else is being hit by the joint venture?','' Marsala said.
Shares of Leap Wireless were off $2.03, or 13.02 percent, at $13.62 on Nasdaq. |
