BlueStone Capital Partners Announces Investment Opinion on Worldcom, Inc.Business Editors NOTE TO EDITORS: The following is an investment opinion issued by BlueStone bluestone, common name for the blue, crystalline heptahydrate of cupric sulfate called chalcanthite, a minor ore of copper. It also refers to a fine-grained, light to dark colored blue-gray sandstone. Capital Partners NEW YORK--(BUSINESS WIRE)--March 8, 2001 Bluestone Capital initiates coverage on Worldcom The former name of MCI. Based in Jackson, MS, WorldCom, Inc. was a major, international telecommunications carrier. It was founded in 1983 by Bernard Ebbers as Long Distance Discount Service (LDDS), a reseller of AT&T WATS lines to small businesses. , Inc. with a 4-Underperform Rating Senior Analyst Susan SUSAN Smallest Univalue Segment Assimilating Nucleus SUSAN Sub Saharan African Network SUSAN Smart Ultrasonic System for Aircraft NDE Kalla Kalla is a village and a mandal in West Godavari district in the state of Andhra Pradesh in India. [1] Geography Panchayats The following is the list of village panchayats in Kalla mandal. References 1. ^ List of Sub-Districts. from BlueStone Capital initiates coverage on Worldcom, Inc. (WCOM WCOM MCI/Worldcom (stock symbol) WCOM Windows Component Object Model WCOM Wireless Communication ; NASDAQ- $17.19) with a 4 - Underperform Underperform An analyst recommendation that means a stock is expected to do slightly worse than the market return. Also known as market underperform, moderate sell, or weak hold. rating and price target of $12. Analyst's Summary -- We are initiating coverage of Worldcom, Inc. with a 4-Underperform rating and a target price of $12. Worldcom is a market leader in long-distance networks and holds enviable market share. Worldcom faces escalating price competition from a growing number of new entrants, which includes ten fast-footed new ones, the former Baby Bells, and perhaps 50 material small carriers. Worldcom offers communications services to businesses and consumers, but expects spinning off the consumer business, which has been plagued by falling prices and escalating customer acquisition expenses. Worldcom's communications services to businesses represents about 60% of its revenues. We believe that the communications for businesses market will deteriorate rapidly over the next year based on our survey of large enterprises. Worldcom's fastest-growing unit is UUNET, an Internet services provider, which is one of the largest in the world. After a year of decelerating growth rates, we believe that the Internet services market could continue to experience disappointment. Corporations that we surveyed indicate they have already built the communications infrastructure they will need for the next few years. -- Bull Case: The bull case for the Worldcom stock is that corporations are reluctant to change vendors, and Worldcom has a substantial market share. Major corporations are not displacing market leaders, but are using the lower prices offered by a myriad of new competitors as a negotiation tool to extract lower prices. The incumbent service providers Verizon (VZ-NYSE-$47.76-Not Rated), BellSouth (BLS-NYSE-$40.62-Not Rated), SBC Communications (SBC-NYSE-$43.97-Not Rated) and Qwest Communications (Q-NYSE-$34.52-Not Rated), and traditional long distance players Worldcom, AT&T (T-NYSE-$23.85-Not Rated) and Sprint (FON-NYSE-$22.01-Not Rated), which collectively represent over 90% of revenues in telecom services are in a slugfest to maintain share in a shrinking market. -- Bear Case: Several data points lead us to believe telecom revenues for corporate users could shrink in 2001 versus 2000, increasing the irrational strategies for survival. Based on our survey of corporate users, we believe that price erosion could wipe out the gains from addition of new bandwidth demand. Corporate customers are anticipating price reductions of 30-35% over the next two years. They expect to add a commensurate amount of new capacity to their networks. Corporate users represent about 60-65% of long distance revenues and the majority of the profits. The downturn in corporate communications services only worsens the picture of the total long distance market, which has been hit by surprising weakness in the consumer segment. BlueStone Capital is a full service investment banking and brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. firm focused on identifying investment opportunities in the emerging growth sector. BlueStone Capital assists clients in maximizing their growth by providing sophisticated investment strategies that are designed to achieve clients' strategic, operating and financial goals. Member NASD NASD See: National Association of Securities Dealers NASD See National Association of Securities Dealers (NASD). , SIPC (Simply Interactive PC) An earlier umbrella term from Microsoft and Intel for a PC that works like a home appliance. For example, it has a sealed case, uses external connectors for expansion and boots in just a couple of seconds. , and ISMA ISMA See: International Security Market Association . |
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