Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Joe Smith who wrote (8497)	6/21/1999 8:40:00 PM
From: DlphcOracl	Read Replies (3) \| Respond to of 57584

For Joe Smith: QWST and GBLX I hold large positions in both GBLX and QWST and here is how I see it, FWIW. The market's reaction to Quest's hostile bids for Frontier and US West is identical to the market reaction to Lycos when they announced the deal with Barry Diller. It is a deal that makes NO sense for Quest and: 1) has little chance of being accepted by either Frontier or US West, and 2) has even less chance of being approved by the shareholders. This is Joe Nacchio playing "Barbarians at the Gate". If you own QWST, hold it; it has dropped as far as it's going to go. If you don't, an argument can be made for buying into it over the next 1-3 months. Why? Because when these bids eventually fail, QWST will rapidly return to its mid-40's price and continue to grow as a premier company in the telecommunications sector should. Don't believe me? Look at Lycos' price two months ago and what it closed at today. In short, Joe Nacchio's ego has given you the oppotunity to buy QWST at a 25% premium!! Regarding GBLX, it's merger with Frontier makes great strategic sense; it's the US West part that it problematic. However, they saw this ahead of time and are creating two separate classes of stock, one for the investors who want a slow-growing, stable Baby Bell and one for the investors who want the high-flying GBLX aspect. This is best explained in the analysis by Salomon Smith Barney telecom expert Jack Grubman. Problem is, this stock is dead money for several months because, like the Lycos/Diller/TicketMaster fiasco, it is a very complex, confusing deal. Wall St. hates uncertainty and penalizes it appropriately. I would NOT buy GBLX until the dust settles from these mergers and you have the opportunity to purchase the appropriate class of stock which reflects the GBLX/FRontier fiberoptic/Trans-Oceanic cable portion of this merger. I hope this helps. DlphcOracl