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Excite@Home shares jump on Comcast rumors

Stock in the high-speed Internet access provider surges wildly at midday on rumors that cable operator Comcast might buy out AT&T's stake in the company.

NEW ORLEANS--Stock in high-speed Internet access provider Excite@Home surged wildly at midday on rumors that cable operator Comcast might buy out AT&T's stake in the company, but shares later settled after the speculation was determined to be a misunderstanding.

Shares jumped from the $17-range around 9:30 a.m. PT to as high as $28, a more than 50 percent spike, within about 30 minutes. But as analysts disputed such a move by Comcast, the shares quickly fell to around $20 a share.

In a keynote panel session with several top cable industry executives at the National Cable Television Association convention here, Comcast president Brian Roberts said, "If you'd want to flip the deal, we'd buy (AT&T's stake) because I think Excite@Home is a fabulous 2,000-person or more Internet specialty, focused content and technology company."

Media reports seemed to indicate Comcast was offering to buy out AT&T's stake in Excite@Home, sending the stock on a roller-coaster ride. But Roberts' comments appeared to be more of a figure of speech than a takeover offer.

Former Excite@Home chairman Tom Jermoluk said he had "no information" concerning a possible bid by Comcast for the high-speed Net access outfit.

Comcast is one of the nation's largest cable operators and a minority stakeholder in Excite@Home. Ma Bell gained greater control over Excite@Home in a recent deal.

Under the deal, AT&T gave Comcast and Cox Communications the right to buy out their stakes in Excite@Home at $48 per share. The move was viewed as an attempt for Ma Bell to steer the direction of Excite@Home, which had drifted somewhat amid conflicting priorities among its various owners.

As if to indicate Comcast's continued commitment to Excite@Home, and dispel any notions that Comcast might want to back away from the cable modem service, Roberts told the audience he would gladly reverse roles with AT&T.

"I think it was a creative solution for everybody," Roberts added. "The reality is AT&T can probably jazz up the service quality best."

An Excite@Home representative said Roberts' comments reflect an expression of confidence in the company and nothing more. AT&T representatives declined to comment on Roberts' comments or the stock market movement. Comcast representatives in New Orleans could not immediately be reached for comment.

"Comcast has not made a bid to take over the company," said Excite@Home spokeswoman Melissa Walia. "We're thrilled with this kind of endorsement."

Excite@Home was the second most active issue traded on the Nasdaq stock market, with more than 60 million shares trading hands.

News.com's Ben Heskett contributed to this report from Las Vegas