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Technology Stocks : WCOM
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To: HH who wrote (9082)2/5/2002 2:12:29 PM
From: Rob S.  Read Replies (1) of 11568
 
I'm not trying to stir up trouble here. It should be pretty obvious that investor trust in corporate management and accounting practices is what has the market upset . . don't kill the messenger.

WCOM and the lovely darling telecomm and equipment sectors look close to clashing to a bottom. The VIX indicator still has not reached a level indicating an overall panic. Is has been at a level of around 23 but has spike up a bit during the last three trading days. When it has hit that low the past 9 times the market has sold off. This time has been no exception. Investors were complacent and had built up high hopes for the coming year that apparently won't be met. That's particularly true in the telecomm and wireless telecomm sectors because of the remaining debt structure and soft end markets for products and services. It remains a buyer's market for long distance and data services and recent bankruptcies have not helped to dry up capacity. Under a better scenario WorldCom, Sprint and others would now be in a position to acquire their bankrupt competitors for 10c on the dollar. But now they are faced with these companies being in bankruptcy protection from their creditors and able to price their services low. But before long this sector will wash out and by the end of the year the end markets should have reached a level of absorbtion and cleaning of competitive forces that an up trend develops.

As much as I don't care for some of the strategies and excess leveraging of WCOM and some others in this sector, the stock looks ready for at least a modest rebound in the coming weeks imo.
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