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 : USW US West: New Things Happening Over the Airwaves -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (113)	5/20/1999 9:45:00 AM
From: Beltropolis Boy	Respond to of 161

fwiw, a wee bit more on the edward jones "sell." ----- RESEARCH ALERT - US West gets sell rating May 19, 1999 12:14 PM CHICAGO, May 19 (Reuters) - Investment bank/broker Edward Jones said Wednesday it lowered its rating for US West Inc. to a sell from a hold after the Denver-based local phone company's recent merger announcement with Global Crossing Ltd. (GBLX). Edward Jones' telecommunications analyst Mel Marten said, the merger "just doesn't make sense." U S West, the smallest and slowest-growth Baby Bell, offers local phone service to customers primarily in the rural northwestern states. Global Crossing, however, is building international communications networks with undersea cables and is buying Frontier, a U.S. long distance network. "Unfortunately, this merger fails to offer US West additional services that would enhance its relationship with existing customers (increasing revenues), and the two companies lack enough operational similarities to induce significant cost-savings," Marten said in a research note. "These are two incompatible phone companies with different fundamentals and investment characteristics," Marten said. "We see these assets as a poor fit and recommend individual investors sell US West shares." Shares of US West were trading up 1-1/16 to 55-7/16.

To: Larry S. who wrote (113)	5/20/1999 9:57:00 AM
From: Sjp	Read Replies (1) \| Respond to of 161

The question the article should raise is "what are the objectives of this merger?" The article states: "The core objection from Wall Street analysts appears to be that the companies simply don't create a natural fit." What does that mean? I'm not reading anywhere what the goal of the merger is (maybe I'm not looking deep enough). If the goal is to expand GLBX/FRO/USW presence into the local market in the US and thereby gain access to each other's client base in order to expand sales/revenue worldwide, it does make sense. The #1 biggest problem with this deal isn't that these guys respective client base and infrastructure doesn't/can't compliment each other... The #1 problem with this deal is a diametric clash of corporate cultures & philosophies. A monopoly entering into the real world takes a lot of time and energy. GLBX/FRO has about 9000 employees. USW has about 55,000. One major reason the stock has taken a hit (besides Wall Street's hammering the deal) is that brokers all over the world get to call all of those old retired USW employees, put the fear of God in them that their good 'ole stable utility is toast... not to mention that their nice little dividend will more than likely get chopped in the next 9 months.