Closing thoughts....INTO I told you a BS Stock, Sprint PCS jumps 54 pct on S&P, ratings, EGNS short term target for next week 1 3/8, SYSF company official has not returned my call i expect a pop on Monday and sharp retracement to .43 BNGO nothing doing, MALL look for mall to go lower Monday...
CHICAGO, Nov 20 (Reuters) - Shares of Sprint PCS Group
(NYSE:PCS_w - news) trading on a when-issued basis jumped
nearly 54 percent on Friday to 19-5/8, boosted by the stock's
inclusion in the Standard & Poor's 500 Index and strong initial ratings.
Lehman Brothers gave an initial buy rating to Sprint PCS, a stock created to track the value of the Sprint PCS wireless phone venture, and set a price target of $21 a share.
Warburg Dillon Read initiated coverage of the stock with a strong buy rating and a target of $25 a share.
Both said they had not expected Sprint PCS to initially be included in the S&P index.
''The fund managers who track performance of that index will have to load their funds'' with Sprint PCS stock, said Eric Melloul, a telecommunications analyst at Argus Research.
Sprint said its restructuring and recapitalization, which results in the formation of the Sprint PCS Group stock, is due to be completed on Monday and the new stock is expected to start trading on Tuesday.
''The whole purpose of the restructuring is to unlock the value of the PCS operation,'' Melloul added. ''Obviously, Sprint did theright thing.''
Under the restructuring, Sprint effectively buys out its cable partners and takes full control of the wireless phone operations.
Sprint shareholders receive one-half share of PCS stock and one share of FON stock. The cable partners--Tele-Communications Inc. (Nasdaq:TCOMA - news), Comcast Corp. (Nasdaq:CMCSA - news) and Cox Communications Inc. (NYSE:COX - news)--receive low-vote shares of the stock in exchange for their stakes.
Under the agreement, they must hold their shares for six months, and subsequently can sell them only in private placements, a Sprint spokesman said. The shares, upon sale, become standard-vote shares.
Last month, Sprint delayed an initial public offering of the wireless operation, citing market conditions. The Sprint spokesman said the company is still planning to pursue an IPO when conditions are favorable.
When-issued shares of Sprint PCS jumped 6-7/8 to 19-5/8 on the New York Stock Exchange with more than 2.6 million shares traded. |
