Qwest Communications (Q) (formerly QWST) Message Board

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Technology Stocks : Qwest Communications (Q) (formerly QWST)

Q 79.24

+1.6%

Nov 26 3:59 PM EST

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To: Rashe W. Stephens III who wrote (978)	3/9/1998 6:32:00 PM
From: Phil Jacobson	Read Replies (1) of 6846

All, this deal is very similar to WCOM/MCI - just smaller. It appears to be modeled on it in fact. I don't have the numbers in front of me but LCI's P/E and price/revenue ratios are far more conservative than QWST's ratios. So a merger even at the $42/sh level for LCI makes QWST's overall ratios go down making it accretive. WCOM's price dropped at first, increased, dropped sharply to a bit below the lower collar, then spiked to within a few dollars of the upper collar where it is today. This deal won't take nearly as long to finalize as MCI/WCOM as there are no monopoly issues for the DoJ to worry about. I suspect QWST shares will go higher very soon and LCI will follow in lockstep. I own both companies and bought more of both today. People are getting more used to this type of deal so I don't think there will be as much volatility as MCI/WCOM. However, if we ever do get into a real bear market, watch out. QWST's high multiple could take a severe short-mid term hit. Phil

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