AT&T deal with TCI seen as a boost
Ma Bell going fromÿ 'dinosaur to race horse,' analyst says
By Jeffry Bartash, CBS MarketWatch
Last Update: 04:45 PM July 01, 1998
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WASHINGTON (CBS.MW) -- Wall Street can't see past the next quarter and is
underestimating AT&T's $48 billion decision to acquire cable company Tele-Communciations
Inc., an analyst said Wednesday.
"This deal will transform AT&T (T) from a dinosaur into a race horse," said analyst Frederick
Moran, who covers telecommunications stocks for Furman Selz.
Many analysts, however, say AT&T overpaid for TCI (TCOMA) and doubt the long-distance
giant can get its massive network up and running by its target date of 2000 -- at least not
without spending billions more than AT&T says it will. That would crimp future earnings.
Amid such concerns, AT&T stock has fallen about 13 percent since the deal was announced
on June 24. The stock closed down 3/8 at 56 3/4.
"Wall Street analysts tend to be short-sighted in their focus," Moran said. "Once the investor
community can begin to recognize that AT&T is putting together a network to offer a bundle
of telecommunications services, which will put them in the driver's seat against the regional
Bells, the stock will come roaring back."
Moran says the technology AT&T intends to employ -- two-way cable connections eventually
based on the new "Internet-packet" standard -- is "completely proven."
"AT&T's ambitions are bold, but clearly grounded in current reality," Moran said.ÿÿ
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