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

To: michael97123 who wrote (8528)	2/17/2001 1:53:22 PM
From: michael97123	Respond to of 11568

Friday February 16, 1:45 pm Eastern Time Forbes.com Dog Of The Day: WorldCom By Mark Lewis WorldCom probably expected a little pop after announcing a deal that Wall Street analysts describe as a big win for the company. Instead, the telecom giant traded lower, on a day when investors were seeing gray clouds behind every silver lining. WorldCom (Nasdaq: WCOM - news) late yesterday announced an agreement that should clear up doubts surrounding its acquisition of Intermedia Communications (Nasdaq: ICIX - news), a telecom company based in Tampa, Fla. Intermedia holds a majority stake in Digex (Nasdaq: DIGX - news), and some Digex minority shareholders, who thought they were being shortchanged, had sued to block the deal. As one of the provisions of the proposed settlement, WorldCom said it will pony up an additional $165 million of its stock for the Digex minority shareholders and their lawyers. Digex fell sharply on the news because the shareholders had been hoping for more. ``It's only $165 million, which is peanuts,'' says analyst Patrick Comack, who follows WorldCom for Guzman & Co. ``I think it's a great deal for WorldCom and a great deal for Intermedia. I think it's not so great for Digex shareholders.'' Digex was off more than 10% in midday trading. WorldCom was off 2% and Intermedia was down 0.8%. WorldCom would have been up on the news, Comack says, except that the Nasdaq was down more than 100 points. WorldCom bought Intermedia to get control of Digex, a Web-hosting company based in Laurel, Md. ``The importance of the deal is that Digex is one of the leaders in managed Web services,'' says Davenport telecom analyst Drake Johnstone. WorldCom ``is counting on Digex and Web-hosting revenues to drive revenue growth going forward.'' WorldCom last week reported fourth-quarter results that included weak revenue growth. The company plans to issue a tracking stock for its long-distance consumer business and focus more on its data and Internet businesses. Digex and its high-margin business are a key part of the strategy, and analysts today applauded the settlement that allows the deal to go forward. Under the original terms of the deal, Worldcom was to have paid $3 billion in stock and $3 billion in assumed debt. ``WorldCom basically stole Digex,'' Comack says. Even under the revised terms, he adds, the deal remains a big plus for WorldCom: ``Digex is probably the best independent hosting company out there.''