Hi NW,
Nothing going on at the auction except for the B block, and obscure markets at that! It seems that the auction is helping many small wireless companies increase their stock price. CVUS seems to be the only exception:
Advanced Radio-2: Smaller Telecom Cos. Seen As Targets
By JANET MORRISSEY
Dow Jones Newswires
NEW YORK -- Takeover rumors and excitement gripping telecommunications concerns appeared to drive the shares of Advanced Radio Telecom Corp. (ARTT) to a 52-week high Monday, analysts said.
The Bellevue, Wash., company's shares traded as high as 14 1/8, topping the high of 13 3/8 set March 6. The Nasdaq-listed stock recently was changing hands at 13 11/16, up 7/8, or 6.8%, on volume of 226,600 shares, compared with average daily volume of 122,340 shares.
Speculation has grown to a feverish pitch in recent weeks of takeovers and further consolidation within the telecommunications sector as companies jockey for position in preparation for the entry of local carriers into the long-distance market and vice versa, analysts said.
Joseph Noel, an analyst from Hambrecht & Quist Inc., said a number of candidates have been mentioned as possible takeover suitors as regional bells prepare to get into long distance and as deregulation steps up.
Noel named Winstar Communications Inc. (WCII) as a strong front-runner, with companies such as AT&T Corp. (T), Sprint Corp. (FON) and MCI Communications Corp. (MCIC) mentioned as other candidates that could benefit from Advanced Radio's technology and licenses.
Advanced Radio Telecom Chief Financial Officer Thomas Grina, citing company policy, declined ot would not comment on either his company's stock activity or on takeover rumors.
But the executive did say that the company plans to issue its fourth quarter and year-end financial results Thursday. At that time, the company will also unveil results from strategy assessment and business plan review it undertook when its new chief executive, Henry C. Hirsch, was named last November.
On average, the four analysts surveyed by First Call Corp. peg the company's fourth-quarter loss at 63 cents a share and its 1997 loss at $2.65. That compares to losses of 80 cents and $3.80, respectively, a year earlier.
On the issue of radio spectrum licenses, Grina said his company has always recognized the "tremendous value" of its nationwide footprint of spectrum, regardless of the prices offered for licenses at the FCC auction.
Market watchers cited WorldCom Inc.'s (WCOM) recent decision to snap up Brooks Fiber Properties Inc. (BFPT), AT&T Corp.'s takeover of Teleport Communications Group Inc. (TCGI), MCI's merger with WorldCom Inc. (WCOM), and WorldCom's acquisition of MFS Communications Co. as deals that triggered and fueled the industry-wide takeover speculation.
Hambrecht & Quist's Noel noted that the entire sector has been gaining momentum in recent weeks, with the active stocks including Star Communications Inc. (STRX), Quest Communications International Inc. (QWST), IDT Corp. (IDTC), Winstar Communications Inc. (WCII) and Pacific Gateway Exchange Inc. (PGEX). Most were also up in Monday's trading. Shares of Teligent Inc. (TGNT) have also been rising.
Noel said the investor frenzy was sparked by a federal court ruling in December that struck down portions of the 1996 Telecommunications Act. In a case brought by SBC Communications Inc. (SBC) in Texas, the judge ruled that SBC and the other Baby Bells were being unconstitutionally prohibited from entering the long-distance market. Although the judge has stayed the ruling while existing long-distance carriers, including AT&T, appeal the decision, Noel said investors believe the regional bells are closer than ever to moving into the long distance market. He said he believes it, too.
'They're knocking on the door,' said Noel, who speculates they'll be in the market in 1999.
Also fueling investor enthusiasm for Competitive Local Exchange Carriers, or CLECs, are spectrum wireless telecommunications licenses now being auctioned off by the Federal Communications Commission. Analyst James Henry of Bear, Stearns said that as the price being offered for licenses in the auction skyrockets, the value of licenses already held by Advanced Radio and others increases with it. This, in turn, drives up the value of the companies that currently hold licenses.
The licenses give companies the right to use airwaves to deliver telephone, video and Internet services through an emerging wireless technology called local multipoint distribution service, or LMDS. WNP Communications Inc. was the top bidder after the first round, offering to purchase 31 licenses for $135.8 million. U S West Communications Group (USW) was a distant second, bidding $7.9 million for four licenses.
Companies, such as Advanced Radio, that already hold licenses in major markets nationwide are seen as hot takeover targets by major telecommunications players, Henry said. He noted that Advanced Radio has a national footprint as well as licenses in the United Kingdom and Scandanavia, which he speculates makes the company attractive to a company such as WorldCom.
'It's more difficult for a single player to duplicate the national footprint of an existing (wireless) player who already has the geographic coverage and licenses in major markets,' he said. It would be more logical for a player to take over a company that's already there.
An Advanced Radio Telecom spokesman could not be reached for comment. |
