I continue to be amazed with Level 3 trading at a higher level than Qwest. It has minimal revenues, is losing money, has laid a few hundred miles of fiber, is a year behind Qwest by their own admission, and has minimal contracts. Sure, the LVLT faithful keep touting how their technology is superior. But I will continue to believe that he who gets there first will win, and Qwest is sucking up a lot of lucrative contracts. And the technology edge LVLT seems to be banking on makes the assumption that Qwest is not going to improve their technology when they lite up.
It seems to me that LVLT is banking on two things, thier CEO's name and they fact they are spending a significant amount of assets in infracity, similar to MFNX. So if they do get their network up, they will be effectively optic from end to end, vs Qwest having to hand off to someone in the city. However, Qwest isn't sitting still and I anticipate they are addressing this with deals like Covad.
The second thing I see supporting LVLT is the chance of a buyout. I know there are many who believe that Qwest is a primary takeover target, but I think LVLT is much more attractive short term. They have name recognition, the inner city connections, and apparently have laid the foundation for fiber network intercity. But most important, they have no revenues, so for a company with vision they could offer 80 bucks a share and I bet they would get it. Offering Qwest that may not get them anywhere as the contracts alone are worth much more than that.
OK, thats my ideas on the subject. Probably wrong but I am sticking with Qwest for the next year or two. After that, if LVLT is around and looking good I'll rotate some profits into it. Maybe. |
