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US Unwired flat in market debut

US Unwired (Nasdaq: UNWR), a network partner of Sprint PCS Group (NYSE: PCS), was treading water in its debut Thursday. After rising slightly, the company's 8 million shares fell back to their offering price of $11.

Shares priced below their original range of $13 to $15 a share. The company said it had planned to net about $103.4 million from the offering, and would use the funds to speed the construction of its PCS network and other general corporate purposes.

"This is a fairly strong player with over 50,000 customers and in it's in the wireless category which has done well," said Kenan Pollack, an analyst for IPO central who expected the deal to fare well. AT&T Wireless (Nasdaq: AWE) was one of this year's most successful IPOs.

The fact that the company has its roots in the 1920s may also lend it some credibility among investors wary of companies with no history, Pollack said.

Pollack added that the company, which serves 11 markets in Alabama, Louisiana, and Texas, would make a good consolidation play down the road as telecom issues continue to pull together.

The company said in its regulatory filings that it has adequate funding to complete its network, but losses are on the rise.

US Unwired recorded a loss of $17.6 million on revenue of $58.6 million for the year ended Dec 31, as compared to a profit of $28.8 million on revenue of $71.7 million in 1998. The company said that as of March 31, 2000, its outstanding debt was about $221 million

Risks to the company's business include its reliance on Sprint PCS, which could be adversely affected by the company's merger with MCI WorldCom (Nasdaq: WCOM).

The deals' lead underwriter is Donaldson, Lufkin & Jenrette.

US Unwired counts Verizon, a joint venture of Bell Atlantic (NYSE: BEL), and Vodafone AirTouch (NYSE: VOD) and Telecorp PCS (Nasdaq: TLCP) among its competitors, according to Hoover's Online.