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MCI WorldCom may issue Net unit tracking stock

The giant long-distance phone carrier is considering issuing a tracking stock for its data and Internet operations, according to analysts.

    MCI WorldCom, the giant long-distance phone carrier, is considering issuing a tracking stock for its data and Internet operations, according to the company's chief executive.

    The company mentioned the possibility of a tracking stock during yesterday's earnings call with analysts. MCI WorldCom reported that fourth-quarter profits nearly tripled, beating Wall Street expectations, on the strength of its fast-growing data, Internet and international operations.

    "We certainly are and continue to examine ways in which we can unlock value if we are not getting the proper valuations we feel for the assortment of our assets," Bernie Ebbers, MCI WorldCom's chief executive, said during a conference call. "We are willing and we are looking, but to go any further than that at this point would be inappropriate."

    MCI WorldCom is one of many telecommunications companies increasingly considering tracking stocks to boost their market value. Earlier this month, leading rival and long-distance company AT&T filed with the Securities and Exchange Commission for an initial public offering of a tracking stock for its wireless division, hoping to raise about $10 billion.

    During the fourth quarter, MCI WorldCom's Internet revenues jumped 55 percent to $1 billion. Meanwhile, data revenues surged 26 percent to $2 billion. The combined revenue from these operations represents about 35 percent of the company's total revenues. For the full year, Internet revenues were up 57 percent to $3.5 billion.

    Still, even as its revenues from data and Internet services soar, MCI WorldCom's stock has not reflected the strength of those operations. Shares of MCI WorldCom closed yesterday at $49.80 and have traded as high as $64.50 and as low as $40.63 during the past 52 weeks. For most of January, however, the stock has hovered in the low to mid-40s.

    MCI WorldCom made many acquisitions last year, including paging company SkyTel Communications and several fixed wireless firms, to better position itself as ways to access the Internet evolve.

    The company said it spent about $4.7 billion on data and Internet investments in 1999.

    "The investments in 1999 will provide future revenue growth and wireless data capabilities that will become increasingly more important as the Internet goes mobile," Ebbers said in a statement.