GTE Message Board - Msg: 2467046

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Technology Stocks : GTE

GTE 4.315

+5.8%

Nov 7 9:30 AM EST

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To: halfscot who wrote (330)	10/16/1997 4:53:00 PM
From: 4-UR-Eyes-Only	of 671

<<Can this really be the best for GTE and its shareholders. Seems more like one-upmanship vs Bernie Ebbers vs what's best for the shareholders. Any thoughts? >> It depends on what your investment goal is. If you do not plan to hold GTE stock for over 7 years, this cash for MCI deal is a REALLY BAD one. GTE will be highly leveraged with this $28B financing. It is at VERY high risk that GTE will be able to generate enough cash to fund it in the very competitive world of telecom. So that is why GTE got some many downgrades in ONE day today and the stock price is in the toilet. But if you are willing to wait over 7 years, then there is a 50%/50% chance that GTE can make it and the stock price will go up to $80's. But we all know MOST of investors including FM's and MM's DO NOT hold stock over 3 years. Therefore, if MCI deal goes through, GTE stock is not going anywhere in the next seven years. Just imaging GTE with $40+Billion LTD on balance sheet, the pressure of cash flow is going to be tremendous. Even with little miscalculation or pricing erosion, GTE may be in FINANCIAL JEOPARDY for the first time in many years. It is a good fit to merger MCI but the cash offer is not a good one, IMO.

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