Wireless stocks recover losses from WorldCom
CHICAGO, June 28 (Reuters) - Wireless stocks retraced their losses on Friday after WorldCom Inc.'s <WCOME.O> disclosure of an accounting scandal earlier this week triggered a widespread selloff in the telecommunications sector.
Shares of US Unwired Inc. <UNWR.O> rose 87 cents, or 37 percent, to $3.22. Shares of UbiquiTel Inc. <UPCS.O> rose 11 cents, or 20.1 percent, to 64 cents, and shares of Alamosa Holdings Inc. <APS.N> rose 16 cents, or 18.8 percent, to $1.01.
No. 4 wireless operator Sprint PCS Group's <PCS.N> stock rose 39 cents or 9 percent to $4.63, and No. 3 AT&T Wireless Services Inc. <AWE.N> rose 30 cents or 5.5 percent to $5.75.
On a broader basis, the Philadelphia Stock Exchange's wireless telecommunications index <.YLS>, the proxy for the sector, gained 3.4 percent to 42.99 after falling as low as 39.03 on Wednesday.
"Some of the buying you're probably seeing now is more individual than anything," William Benton, wireless analyst with William Blair & Co., said.
Benton added that much of the selloff earlier this week was likely from institutional investors who had to adhere to internal rules about selling stocks after they fall to levels where they might be delisted.
Analysts said they expected wireless stocks to remain volatile as many of them hover between $1 and $5.
"Stocks are likely to remain volatile as institutions adjust their portfolios and individuals jump in and out," Benton said.
Peter Friedland, wireless analyst with WR Hambrecht & Co., said he expects the sector to continue to face issues such as excessive competition, high levels of debt and the likelihood of consolidation.
"The issues that confront the sector remain the same," Friedland said.
WorldCom revealed late on Tuesday it hid more than $3.8 billion in costs and will have to restate results for the last five quarters, erasing all profits from the beginning of 2001. |
