Bear Stearns Internet Services Announces Investment Opinion on Covad Communications Group, Inc.

Business Editors

NOTE TO EDITORS: The following is an investment opinion issued

by Bear Stearns Internet Services

Bear Stearns Internet Services Analysts Raise Covad Communications

Group's (NASDAQ:COVD) Target Price to $150

NEW YORK--(BUSINESS WIRE)--March 16, 2000

Bear Stearns Internet Services analyst James H. Henry and Internet Technologies analyst Robert Fagin reiterated their BUY rating on Covad Communications Group, Inc. (NASDAQ:COVD) and raised the company's target price to $150 per share. Their decision was based on Covad's recent acquisition of LaserLink.net and the outlook for robust financial and operational results.

The analysts believe the LaserLink.net acquisition will endow Covad with crucial core competencies that effectively expand its ability to address the market and set the stage for accelerated growth going forward. "We consider this deal indicative of Covad's willingness and ability to continue to expand its capabilities and market opportunity in order to create substantial incremental value for shareholders," explained Henry. According to the analysts, Covad presents a truly open-ended opportunity with the ability to pursue additional new growth opportunities as it expands its distribution channels, augments its product portfolio, broadens its geographic coverage into new markets, and leverages additional broadband access technologies. "We would expect Covad's stock to respond very positively as investors see evidence of Covad's consistently strong financial and operational performance, coupled with the pursuit of additional avenues of growth," said Henry.

Furthermore, the analysts explain that Covad would now have the complete bundle of capabilities - the broadband last mile, IP transmission capability, subscriber management and billing system - necessary to provide a full suite of services to its customers. "The LaserLink.net acquisition should unlock a significant market opportunity that Covad has not been able to address in the past," said Henry. The analysts added that Laserlink.net's brand name customers include Compaq, Myfamily.com, Amway, and the St. Louis Cardinals. "By coupling LaserLink.net's VISP capabilities with Covad's broadband access platform, we believe that the combined entity will have a "killer app" for addressing the needs of "big brand" companies on a broad basis," concluded Henry.

To learn more about this report or to speak with the analysts, please contact Michelle O'Brien at 212-272-6659.

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