Upgrades boost wireless company's stock
Shares of Western Wireless, a supplier of phone services to rural parts of the western United States, surge more than 14 percent after upgrades by two Wall Street analysts.
David Freedman of Bear Stearns boosted the stock to "buy" from "accumulate," and Kevin Roe of ABN-AMRO raised the company to "outperform" from "hold."
The upgrades follow a 30 percent decline in the shares this year because of investor worries about increased competition.
The shares fell 13 percent yesterday during one of the most tumultuous days on Wall Street, but they have rallied $5.75 to $45 by the 1 p.m. PST close of regular trading today on volume of 1.9 million shares.
The analysts also consider Western Wireless a potential takeover target, as larger service providers seek to increase market share. The company's rural market would add favorably to a suitor's network; its network covers about 25 percent of the continental United States.
Western Wireless is a niche player in the rapidly changing wireless industry. At the end of the fourth quarter, it had 834,700 customers in 19 states as well as subscribers in foreign countries.
Verizon Wireless, a new venture created from the merged mobile phone networks of GTE, Bell Atlantic and Vodafone, will have 24 million U.S. subscribers.
The BellSouth-SBC venture unveiled today will serve 16.2 million subscribers nationwide and bring $10.2 billion in revenues, according to the companies.
The venture may offer a tracking stock. AT&T's wireless division has also announced plans for a separate stock issue.
Western Wireless, which markets its services through the Cellular One brand, reported revenues of $567.3 million in 1999 and a net loss of $148.8 million.