Thanks, David. Some news - though old to you and many.
(I've been in overload.)
<A> Goldman Upgrades Metronet Commun To Recommended List
<A> Goldman Had Rated Metronet Commun At Mkt Outperform
<A> Investors Welcome Young's Appointment As MetroNet Pres, CEO
By Scott Adams
TORONTO (Dow Jones)--MetroNet Communications Corp.'s (METNF) Class B shares have jumped 6.7% in Toronto trading Monday on news the company has hired Craig Young as president and chief executive.
Young was formerly president and chief operating officer of Brooks Fiber Properties Inc., a U.S.-based local telephone service provider that WorldCom Inc. (WCOM) acquired last month for US$2.4 billion.
The Rhode Island-based Providence affiliated venture capital firms were early investors in both Brooks Fiber and MetroNet. Providence Equity Partners and Providence Media own 33% of MetroNet's voting shares and 62% of its non-voting shares.
MetroNet shares have risen as high as 32.85 Monday, but have settled back to 32.70, still above their previous 52-week high of 31.90.
Goldman Sachs & Co. analyst Ken Hoexter has placed MetroNet's stock on his firm's "recommended list," up from the previous rating of "market outperform." Hoexter initiated coverage on MetroNet in January. Metronet went public in December.
In his initial January report, Hoexter said he was holding back on some of his estimates for MetroNet, until the company hired an experienced leader. The former president, Eric Hobson, was an entrepreneurial investor in the company, who held the position on an interim basis, he said.
Hoexter has raised his target price on MetroNet's stock to US$30 from US$25, as he sees the company hitting his targets sooner with Young at the helm. He now estimates that MetroNet will hold 13% of the Canadian local business telephone service market in 2007, up from his previous estimate of 12%.
But at least one Canadian analyst is still calling the stock "expensive" after hearing about Young's appointment. John Grandy, an analyst with Deacon Capital Corp., sees the Canadian local telephone service market shaping up to be much different than the U.S. market.
There are only three major metropolitan centers in Canada, compared with several in the U.S., and these Canadian centers are already well laid out with fiber by companies other than MetroNet, he said. MetroNet faces tough competition in the newly deregulated Canadian local phone service market from existing phone and cable companies, he said.
But Hoexter said that setting up a local telephone service is a tough business that needs experience. "Fiber laid does not make for competition," Hoexter said.
James Henry of Bear Stearns & Co., who also initiated coverage of MetroNet in January, called the hiring of Young a "coup" for MetroNet, but didn't change his already positive rating on the stock. |
