Metromedia Fiber Networks Inc. (Nasdaq:MFNX) hopped up 9 percent Wednesday after getting talked up by two analysts.
Shares were up 1.81 to 23.81 after Kaufman Bros upgraded the stock from "buy" to "strong buy" and Goldman Sachs called the stock a bargain.
Goldman Sachs said late Tuesday it believes weakness in the company's stock has created "an excellent buying opportunity." Metromedia Fiber's stock is down 47 percent for the month.
The firm said the company's fundamentals are "intact," and the company's management remains "very comfortable" with Wall Street's third-quarter expectations. It expects the company to post third-quarter revenues of $45 million, an EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $54 million, and a net loss of $140.3 million.
Metromedia's announcement on Tuesday that it will open nine Internet Service Exchange facilities in the U.S. and Europe by year-end is part of the company's existing capital plan and does not require additional funding.
Goldman analyst Frank Governali stated that Metromedia's stock drop is due to investors selling weak stocks in an effort to create a loss for tax purposes that would offset their gains in other stocks. Investors seeking to reduce their holding in competitive local exchange carriers, or CLECs, also are selling Metromedia Fiber, he said in the report. After Oct. 31, which is "year end for mutual funds," this selling pressure should ease.
Reuters contributed to this report.