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Posted
Nov 28 2007, 05:10 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Verizon scored big PR points yesterday by announcing that customers will be able to use any device on its wireless network. What's more, you'll be able to download any application to those devices. Investors didn't seem too impressed by the news: the company's share price barely moved and closed at $41.46.
The announcement sounds revolutionary, but there are some huge red flags to note. First, the "any apps, any device" mentioned in Verizon's press release is a joke. That's because Verizon's network works with phones that use CDMA technologies. Apple's iPhone and a lot of other devices run on different technologies, and it's unlikely they can be tweaked for CDMA.
Another big question: Phone carriers heavily discount cell phones (in many cases giving them away) and make up the loss in monthly service fees. If you're going to buy your own phone and bring it over to Verizon's network, you won't get that discount. Will people pay hundreds of dollars for a phone just to use Verizon? Will manufacturers see such value in this that they start making CDMA phones specifically for Verizon's network?
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Posted
Jan 09 2008, 12:57 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
A fairly obvious consequence of a troubled economy: People can't pay their bills. And AT&T shares are suffering as a result. The company said Tuesday it had to disconnect more broadband and landline phone customers for not paying their bills. AT&T stock got punished in the market, dropping 9.5% on the news. Shares were down slightly today to $38.96.
In an interesting sign of the times, AT&T CEO Randall Stephenson said the wireless side of the business was still OK. When the economy goes soft, people dump their landline phones first and hold on to their cell phones as long as possible, he said. In the old days, as News.com points out, people would never think about disconnecting their landline phone.
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Posted
Feb 12 2008, 06:53 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Firestone. American Motors. Texaco. Pan Am. Worldcom. These large American companies were once at the top of their industries. Pan Am was the leading global airline for decades. All are gone: Some were sold off, others went bankrupt. Who could have predicted it?
There are several iconic U.S. companies that may well not exist at the end of 2008. Some may not even make it halfway through the year. Not all will go out of business. Some may simply be auctioned off in pieces. Others may be bought. These companies will not exist in their current forms as they are known to their shareholders and consumers now.
When a company ceases to exist as an independent entity, it is not necessarily bad for shareholders. Some may be worth more in parts. Often a bust-up or merger is what brings owners the most money. Here are the big ones that probably won't make it. (A more detailed assessment is available at 24/7 Wall St.)
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Posted
Feb 20 2008, 08:38 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Verizon has been the ruler of the walk, but that has changed. Yesterday, the shares hit a 52-week low at $35.19.
The large run-up in Verizon's stock last year was based on two things. The first was that its new fiber-to-the-home TV and broadband service was picking up customers from cable companies like Comcast. That sent Comcast shares to multi-year lows. Comcast's latest earnings showed that the impact of Verizon's initiative was less than expected. More recently the phone company said that it could not get HD set-top boxes to many of its new fiber customers. Motorola had fallen behind in making them. All of a sudden, the $23 billion that Verizon put into the fiber project did not look quite so good.
Then the market was hit with news of a cellular price war between Verizon Wireless and AT&T. T-Mobile got in on the action just or fun. Cellular revenue is what has driven Verizon's revenue and operating income over the last several years as it has lost landline business to VoIP.
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Posted
Feb 20 2008, 12:17 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Price war! Two words consumers love to hear. In this case, the war is among wireless carriers unveiling unlimited calling plans for heavy phone users. Verizon started it all by announcing a $100 plan for unlimited voice. AT&T and T-Mobile USA joined in with similarly-priced plans, but T-Mobile added text messaging as well. That leaves everyone waiting to hear from Sprint, the last of the big four carriers. UBS telecom analyst John Hodulik thinks Sprint will undercut everyone with an unlimited plan priced at $60-$80 a month. Hodulik thinks Sprint will make the announcement in the next few weeks.
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Posted
Mar 11 2008, 01:26 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
What a horrible day for Sprint shares. The stock hit a 20-year-low today. That's right, shares dipped to $5.55, the lowest level since July 1988. The stock price rebounded and closed at $6.17, down 8% from yesterday.
I can't find much reason for the tankage today, other than an analyst note from the Stanford Group lowering 2008 estimates to 23 cents per share from 43 cents. The analyst reviewed Sprint's last 10-K and thinks that Sprint's costs are going to go up. Last week, a Goldman Sachs analyst warned investors to "stay away from the stock." Looks like people are taking his advice. There's some piling on here in the analyst crowd, and I can't say it's unwarranted. But Wall Street's wildly varying expectations suggest a general cluelessness about where Sprint is headed. Analysts on average peg Sprint's 2008 profit at 21 cents a share. But the range of predictions goes from a 20 cent per-share loss to a profit of 87 cents.
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Posted
Mar 26 2008, 12:10 PM
by
Kim Peterson
Rating:
Filed under: Google, Comcast, Time Warner, Sprint, wireless, Intel, Verizon, AT&T, Kim Peterson, Clearwire, VIX
Money Blog: Top Stocks Blog - MSN Money
Lots of big numbers are being tossed around today in support of WiMax, a wireless technology that can deliver high-speed Internet access over several miles. Clearwire is a leader in developing WiMax, and has been trying to hammer out a partnership with Sprint for months. But working out a deal hasn't been easy, partly because building out WiMax is so expensive and partly because both companies have their own struggles to deal with.
Now, the two biggest U.S. cable companies are stepping in with loads of cash. According to the Wall Street Journal, Comcast and Time Warner are talking about funding a new WiMax company, one that would be run by Sprint and Clearwire. The company would operate a nationwide WiMax network. Comcast is reportedly offering $1 billion and Time Warner is adding $500 million. Bright House Networks, a small cable company, might pony up between $100 million and $200 million.
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Posted
Apr 03 2008, 11:45 AM
by
Douglas McIntyre
Rating:
Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius XM, AT&T, Time Warner Cable, Toyota, GM, Utilities, Dish Network
Money Blog: Top Stocks Blog - MSN Money
When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.
If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution. As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.
Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.
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Posted
May 01 2008, 10:53 AM
by
Kim Peterson
Money Blog: Top Stocks Blog - MSN Money
I love the idea of watching television shows on my cell phone. But would I pay for it? Eh. I'm not alone here -- only about 5% of consumers are willing to pay for mobile TV. Yet that isn't stopping AT&T from launching a paid service next week that broadcasts TV programs on cell phones. AT&T is shooting itself in the foot by setting the financial bar so high that few users will sign up. According to the WSJ, you have to buy one of two new phones (at $200 or $300) to get started. Then you have to pay $15 a month on top of what you already pay for voice and data plans. The traditional two-year commitment probably applies as well. Still, investors seem to be happy with the news, because AT&T shares were up 3% at last check to nearly $40.
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Posted
May 21 2008, 10:33 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Sprint Nextel has a problem keeping customers happy, according to the latest numbers from the American Customer Satisfaction Index. Sprint's numbers are so bad, in fact, that the index's founder wonders how the company can even stay afloat. "Business is unsustainable in a competitive marketplace when customer satisfaction scores are as low as Sprint Nextel's," said the founder, Claes Fornell. Sprint's satisfaction level dropped 8% from last year to 56 on the 100-point index. Verizon scored the best in the industry, at 72. Commenters on this blog regularly slam AT&T for its service, but the company's cell phone division gained 4% to score a 71. You can see the full customer satisfaction index here.
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