Major owners in Teleport=TCI , Comcast, and one other-60%. $11 Billion price is around 50 times earnings, amazzzzzzzing multiple . Where are you TA??? Let's hear more comments on this deal. How about it Happy , Fred ???????????????????
Question for anyone...If TCGI has 600 M shares outstanding and the proposed acquisition price is `$56 per share, how does this become an $11 Billion acquisition??? Just wondering if my calculator went bonkers on me...:-)
As for Teleport and it's fit with AT&T...I think it's a good 1st step. Their network investments since their founding certainly will enhance AT&T's ability to offer Digital Link business nodal service to our customers...The question is, as someone else pointed out, how quickly and easily this network and their whole operations can be assimiliated. Hopefully, since it's not a totally foreign technology or concept, it'll go pretty quickly and will start adding to competitive winback revenues...Sales force integration should be relatively easy, unless cultures clash.
On the other hand, I'm a little bit concerned about the income statement...and what effect these losses will have on AT&T's P&L...Maybe the infrastructure investment TCGI is making will be more cost effective given AT&T's ability to buy in volume...and the financial cost of capital that T generates...(eg: AT&T's cost of capital should be a lot less than TCGI could justify on it's own...)
We'll just have to wait and see how this fits into the message that Mr. Armstrong will be delivering to Wall Street and the world at the end of January...Is this a small part, or is it THE basis for future strategies? I'm guessing the former...
I think it would be a small part, but a crucial huge first step. As I mentioned in my previous post it lowers transport costs for all LD. They can now bypass the RBOCs more efficitively in virtuallly every major metro. It gives them a stronger, more competitive stance marketing to big businesses.
Right now, it's the only move into local they can make. The regulatory environment right now will not allow them to effictively resell unbundled local loop. I really doubt they can get approval to buy an RBOC at the moment. Besides, if they were to buy a RBOC with all of its residential customers, that only gets them into a portion of the country;a slice of the pie, not the whole pie. They're only choice to get into residential is to fully develop Project Angel or wait until unbundled local loop is a reality. IMO, the RBOCs will have to truly offer fair priced unbundled local loop if they ever wish to touch LD.
You're right other big moves will need to happen. AT&T needs to strengthen its international alliances. They also trail significantly in the Internet market. Look for them to buy or ally with @Home. A cable alliance might also be another interesting way to get back into local residential service and high-speed Internet. According to the Wall Street journal, a sticking point with the TCG transaction has been whether they will maintain long-term access to TCG's leased cable from Cox, TCI, and Comcast. This should give you an idea about where cable will figure into AT&T & Armstrong's vision of the future. It will be a key component.
I too recently picked up shares in STRR and am pleased with recent returns. I also bought FIBR, SEMI, AKLM, and ATC. I like em all and expect same to do well . Semi is the only laggard but I think that will change with earnings reports . Very fond of a stock in tech manufacturing called ACCM . Looking forward to a good year in '98. Recently sold T at 63 but am still following with an eye towards getting back in if it looks promising. Jury still out in my book , but this is the best stock board I've run across. That Lissy is a card and I like to read TA , Happy ,and the others. Have a good 'un !!