AT&T stock touches new high

AT&T shares closed nearly 6 percent higher at 71, one day after the company announced a $5 billion deal to buy IBM's Global Network international data business.

Shares have hit a 52-week low of 48.375.

One reason AT&T is peaking is Ma Bell's penchant for spinning off its business units into separate companies, as it did with Lucent Technologies, according to Sheldon Grodsky of Grodsky Associates, a securities brokerage firm. Although AT&T is facing competition from new-age telcos and high-speed data providers, the company is making strides to offset the encroachment by acquiring new revenue sources.

"The company's bread and butter, long distance service, is under extreme competitive pressure," said Grodsky. "Their other businesses, such as cellular, are growing but they've been getting some benefit of the doubt from Wall Street."

"To me the stock seems to be fairly fully priced," he concluded.

The IBM deal has been viewed by many analysts as a way to keep AT&T in the global data game. Meanwhile, the company's proposed acquisition of Tele-Communications Incorporated will give AT&T a much-coveted end run around the Baby Bells for "last mile" access to home and business customers.

That deal is expected to close in mid-1999 pending regulatory approval.

AT&T got another shot in the arm today when some analysts speculated federal regulators would not require TCI to "unbundle" its broadband pipes.

Internet service providers, led by America Online, want unrestricted open access to TCI's cables to offer their own data services to users. But many analysts doubt the Federal Communications Commission will make that a requirement of the merger.

Meanwhile, Wall Street has been filled with speculation that AT&T is in discussions with Time Warner cable over some form of partnership under which AT&T could market local phone service to consumers in the giant cable operator's regions.

An AT&T spokesman declined to comment on any possible negotiations.