Cisco Passes AT&T....
(http://pubs.cmpnet.com/internetwk/news/news0630-1.htm)
Cisco Outpaces AT&T
By JOHN T. MULQUEEN
It's not much more than a decade old,
but Cisco Systems is already worth
more than AT&T. The router/switch
manufacturer reached a market
valuation of $94.45 billion, compared to
AT&T, which is worth $92.6 billion.
Cisco' s stock has grown from about
$75 in early June to $91.44 yesterday.
The stock was helped by a strong
recommendation early yesterday from
Morgan Stanley. The investment banking
house estimated that Cisco's share
price could rise to $105 in coming
months.
AT&T, on the other hand, was hard hit
last week by its $48 billion offer for
Tele-Communications Inc. The stock
was down 13 percent last week but
inched up 25 cents to $57.50 .Earlier
this month, AT&T's share price was
about $61, but rose to $68 ten days ago.
"They love their Cisco Systems," said
Andy Schopick, a securities analyst at
Nutmeg Securities, Westport, Conn.
"The company has great profit margins
and strong growth and generates a
bundle of cash. It is getting rewarded for
it."
When Cisco was selling for $85 a share,
analysts estimated it would cost
between $120 and $140 billion to buy
the company. "No one is going to buy
this company," Schopick said, who
found it hard to believe that such a new
company could surpass AT&T's market
value. "How old is it? About ten years,"
he added.
Of course, if you add Lucent
Technologies back to AT&T, the value of
the combined company rises
considerably. Lucent, which was spun off
in September, 1996, has a market value
of $108 billion. Its share price has more
than doubled since the beginning of the
year. The stock reached $82.81
yesterday, up $2.38 for the day.
Combine the $108 billion with AT&T's
$92.6 billion and you have a company
valued at over $200 billion. Add NCR
Corp., which was spun off in 1996, and
the reconstituted AT&T would be worth
about $203.3 billion. |
