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Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme/No Pennies -- Ignore unavailable to you. Want to Upgrade?

To: ErnestPoe who wrote (62400)	3/17/1999 10:21:00 AM
From: Frost Byte	Read Replies (3) \| Respond to of 119973

ESPI NEWS - TAKEOVER TARGET: If e.spire Communications (ESPI:Nasdaq) is truly in the crosshairs of a suitor, options traders may already be on to it. Maryland-based e.spire has been on the receiving end of fairly aggressive order flow for the past two sessions, and rumors are seeping into the market that Qwest (QWST:Nasdaq) may be taking a look at the possibilities of a deal. "I've heard the rumor," says analyst Frank Murphy with First Union. "I think it's highly speculative." The action primarily has been out-of-the-money call buying, and yes, speculative. Today, e.spire's shares were up 1 3/16 to 9 7/16, making the investors who bought the March and April 10 calls on Friday very happy. Today, the volume on the March and April calls, primarily those at the 10, 12 and 15 strikes, showed unusually high volume. While it normally trades just 313 contracts a day, e.spire March 10 and 12 1/2 calls traded more than 550 by midday Monday. The premium on those options also rose considerably today. The March 10 calls jumped to 1 1/8 ($112.50) from 3/4 ($75) and the 12 1/2s price hit 7/16 ($43.75), a 3/16 ($18.75) spike on the day. Acquiring e.spire, a competitive local exchange carrier, would give Qwest some dearly needed local networks. For several years Qwest has been building a long-distance fiber-optic network for voice and especially data communications. It still lacks certain facilities to connect to some customers. At an analysts meeting last month, Qwest CEO Joe Nacchio said the company intends to aggressively expand its local infrastructure, according to Murphy. "He didn't clarify whether that would be buy or build," Murphy says. Buying e.spire would hardly complete Qwest's puzzle, since it serves mostly small to mid-sized metropolitan areas in the southeastern United States. But e.spire is cheap. Murphy calculates that the ratio of e.spire's "enterprise value" (market cap plus net debt) to its estimated 1999 revenue is 4.3, compared to a group average of 4.9. e.spire's peers include GST Telecommunications (GSTX:Nasdaq) and ICG Communications (ICGX:Nasdaq). Also, the ratio of e.spire's enterprise value to gross plant and equipment is 2.3, compared to an industry average of 4. By both those yardsticks, e.spire might make a cheaper play than Teleport Communications Group, which was acquired by AT&T (T:NYSE) last year. A Qwest official declined to comment. e.spire could not immediately be reached for comment.