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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: MGV who wrote (4940)	8/23/1999 9:41:00 AM
From: PDL	Respond to of 11568

MGV: I think the drop in WCOM is a combination of a. market perception of slowing growth due to LD price wars; b. concerns that WCOM needs cellular and will have to dilute earnings to get it; c. concerns that the frame relay debacle will lead to lost revenue and/or is evidence of deeper problems relating to MCI integration; d. Macro pressures on the market stemming from fears of rate increases; and e. we are heading into a seasonally weak period (Aug-Oct) in the overall market. This was a good summary of points of concern. PaineWebber's analyst Eric Strumingher has just (today) put out a research note adding to the cautions for the telecom (LD) sector ("A More Sober View of Large Cap Telecom Svcs. Stocks"). Among the "key points": New evidence that pricing pressure has extended to more market segments -- specifically, QWST led a significant price cut for mid-sized business customers. This could impact intermediate term revenue growth estimates (and 2nd half earnings "quality"). Strumingher continues to emphasize the RBOC's and GTE over the long distance companies near-term. "Increasing demand for data services should make telecommunications services a top growth industry for years to come, and MCI Worldcom and AT&T are poised to be the biggest beneficiaries of this demand. However, we cannot identify a near-term catalyst for long distance stocks and believe that it could take some time before we get a return to previous highs." This report, along with the "slamming" report that singles out WCOM, plus the lingering concerns of the outage could make this a difficult day/week for WCOM. Or maybe investors will shrug this off... Just wanted to give the thread a heads-up.