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Technology Stocks : Winstar Comm. (WCII)
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To: Steven Bowen who wrote (8226)9/12/1998 10:07:00 AM
From: Gary Kline  Read Replies (2) of 12468
 
Steve,
I was reading an article in the WSJ this week regarding British
Telecom and the $7 billion received from selling 20% of MCI to
WorldCom. An analyst for Robert Flemings Securities Ltd. stated
that following the cash influx, BT will not be optimally "geared".
BT's current gearing ratio (ratio of its debt to its equity) is at 34%
and following the cash infusion will have a net-cash position.
Apparently other large Telecom companies like Telefonica de
Espana SA, Deutsche Telekom AG and France Telecom SA have
individual gearing ratios of >100% and have ideal debt-equity ratios.
The CEO of BT is on record for using some of that money to expand internationally. I find it interesting that analysts look at BT as a cash machine not optimally geared and they need to assume more debt as a cheaper way to finance their operations rather than increasing dividends.
1) Do you think gearing ratios can be applied to CLEC's as they mature?
2) BT according to Ric Dunavent's post was interested in WCII
back in June (I think he stated BT was acquiring 25% stake at $62 if WCII bought certain assets of a LD carrier); what do you think will be BT's port of entry into the USA or are the content with the ATT deal for now.
Regards,
Gary

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