Bill told us the telecoms where "unstoppable tornados"
Bill is a cementhead, he just got lucky being a SI Momo trader during the Internet bubble.
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>>Telecoms investors were hit by a double whammy on Thursday as both Deutsche Telekom and the KPNQwest brought bad news to the markets.
Deutsche Telekom must work to refresh its tattered image
The German telecoms giant Deutsche Telekom continued Wednesday's share price fall, sliding 4.8% to a new low at one point on Thursday after the credit rating agency Moody's cut its outlook for the group.
The stock closed down 2.1%.
The latest fall in the German "people's share" coincided with a filing for bankruptcy protection by the data communications services firm KPNQwest.
KPNQwest, which is owned by KPN and by Qwest Communications, filed for protection from its creditors under Dutch law after its entire supervisory board resigned.
"The market has completely written this company off," said one analyst, noting that most of the company's cash are held by banks which are demanding that its assets are sold.
But KPNQwest has not been able to find a buyer, so its parent companies have been forced to write off several hundred thousands euros.
Trading in KPNQwest shares was halted on Thursday.
The shares have lost 90% of their value this year, and closed at 0.58 euros on Wednesday.
Analysts predicted that the stock would fall when trading resumes on Friday.
Angry investors
Deutsche Telekom's investors have also taken a hit in recent months, and they are not happy about it.
Mobilcom wants its French partner to inject fresh cash
A key difference from the KPNQwest saga is that Deutsche Telekom's woes are felt by thousands of German people who have never owned any other shares.
The Deutsche Telekom privatisation in 1996 introduced share ownership to the German grassroots.
Few had expected the share to crash, so the share price's fall has come as a shock to many.
Deutsche Telekom's market value has fallen by 34bn euros or 32% in just over a month, falling by almost a billion euros a day.
On Wednesday, the company reported a 1.8bn euro (£1.1bn; $1.7bn) net loss during the January to March period, down sharply on last year's 358m-euro loss for the same period.
France telecoms
The incumbent operator across the border in France has also seen its shares slip to new lows following a row with its German mobile phone partner Mobilcom.
The wrangle - over whether or not France Telecom should cough up billions of euros to pay for Mobilcom's high-speed mobile phone network - could be both lengthy and painful.
"One of the possible outcomes is that Mobilcom goes bankrupt, and we would greatly regret that, so we have to work as fast as possible to find a solution," a France Telecom spokesman said.
France Telecom shares traded at about 20 euros on Thursday, down 90% since March 2000.
Mobilcom gained 0.25%.
KPNQwest shares, which have lost 90% of their value this year, closed at 0.58 euros on Wednesday.
Trading in the stock was halted on Thursday.
Analysts predicted that it would fall when trading resumes on Friday. |
