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.

Technology Stocks : (LVLT) - Level 3 Communications -- Ignore unavailable to you. Want to Upgrade?

To: Zoro who wrote (3276)	8/7/2002 3:05:17 PM
From: Glenn Petersen	Respond to of 3873

The S&P downgrade: biz.yahoo.com Tuesday August 6, 4:15 pm Eastern Time Reuters Market News S&P cuts Level 3 on debt concerns, shares fall By Jonathan Stempel NEW YORK, Aug 6 (Reuters) - Credit rating agency Standard & Poor's on Tuesday cut its ratings for Level 3 Communications Inc.(NasdaqNM:LVLT - News), less than a month after billionaire investor Warren Buffett invested in the fiber-optic cable operator. Level 3's shares fell more than 13 percent, and its bonds fell slightly. S&P cut Level 3's corporate credit rating one notch to "CCC," its fourth-lowest "junk" grade other than default, from "CCC-plus," with a negative outlook. The rating agency said Level 3 will have difficulty generating substantial cash flow and cutting its $6.4 billion of debt. Downgrades often boost borrowing costs. Access to capital markets for most junk-rated telecoms and technology companies has been meager or nonexistent this year. Tom Friedberg, a telecom industry analyst and senior vice president at Brean Murray & Co. in Denver, said Level 3, based in Broomfield, Colorado, is weathering the telecom spending slowdown well, but needs to boost revenue and cash flow. "The good thing for Level 3 is that many of its competitors are already in receivership," said Friedberg, who neither rates Level 3 nor does business with the company. "If Level 3 can gain mass and more traffic, it can enjoy economies of scale. But I can't say when this telecom nuclear winter will end." Level 3 shares closed Tuesday on the Nasdaq at $6, down 92 cents, or 13.3 percent. They have more than doubled since the Buffett investment, from $2.89, but have fallen 95 percent from their March 2000 peak of $132.25. Level 3's 9.125 percent notes maturing in 2008 fell about two cents on the dollar to 60 cents and now yield 21.61 percent, traders said. Moody's Investors Service said it rates Level 3's senior unsecured debt "Caa3," one notch below S&P's rating. "LIMITED SAFETY MARGIN" S&P said Level 3 had about $1.5 billion of cash and $650 million of available bank credit on July 31, "providing only a limited safety margin" after accounting for capital expenses and more than $500 million of annual interest payments. "The industry is expected to remain weak for many years due to excess capacity, slow demand for long-haul data services and potentially increased competition from service providers that may emerge from bankruptcy," said S&P analyst Michael Tsao. "(Level 3) is not well-positioned to deal with such weak industry fundamentals." Level 3 on July 18 posted a second-quarter net loss of $156 million, or 39 cents per share, on revenue of $750 million, up 94 percent from a year ago. Buffett, the "value" investor who runs Berkshire Hathaway Inc. (NYSE:BRKa - News), bought $100 million of Level 3 convertible notes on July 8 in his first foray into the technology sector. Two other prominent investors associated with "value" investment styles also bought the notes. Longleaf Partners Funds(Nasdaq:LLPFX - News), led by O. Mason Hawkins, bought $300 million. Legg Mason Inc., home to Bill Miller and his Legg Mason Value fund(Nasdaq:LMVTX - News), which has beaten the Standard & Poor's 500 stock index for 11 straight years, bought $100 million.

To: Zoro who wrote (3276)	8/7/2002 8:54:15 PM
From: Jesica Dawnet	Respond to of 3873

Helllooo! "What downgrade"? You got to be kidding. You probably know by now, but here is a URL example. biz.yahoo.com.

To: Zoro who wrote (3276)	8/7/2002 9:11:18 PM
From: Jesica Dawnet	Read Replies (1) \| Respond to of 3873

Here are two more URLs for your pleasure. biz.yahoo.com thestreet.com If you think this is bad news, just wait. I guess this stock has potential in a very, very long term outlook, and if you buy really low to be safe, and if the management can save this company somehow soon. I just don't see it though; not with all the negative facts I have on hand that has not even filtered to the market yet. I think you better wait, because it is going to get hammered, and then if you want to buy, at least it will be at a safer price. This is amazing. This stock has gone from $2.5 to above $7, and now it is going to crash down again. I'll bet it will go up significantly again in the short term before it goes below the $2.5 mark. There seems to be plenty of enthusiastic buyers and enthusiastic sellers and shorters for this stock.