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Archive for Thursday, August 31, 2000

Failed merger saps Sprint stock

August 31, 2000

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— The failed merger between Sprint Corp. and WorldCom Inc. has brought a blow to the pocketbook for Sprint shareholders and executives alike.

Sprint's main stock, known by its FON trading symbol, closed Wednesday at $32.54, less than half the $76 in stock that WorldCom was going to pay.

Sprint's separate PCS stock, which tracks the operation of its wireless business, traded Wednesday at $48.50, 20 percent off its price when the deal was canceled July 13.

"We are not happy at all where the stock price is," said Ronald T. LeMay, Sprint's president and chief operating officer.

The value of LeMay's Sprint and Sprint PCS securities have fallen by about $223 million, to about $127 million, since the merger was canceled.

Sprint, which employs about 20,000 people in the Kansas City area, will shift from being known primarily as a national long-distance provider to a mover of voice and data by both land lines and wireless technology, LeMay said.

LeMay said Sprint would work its way out of the stand-alone consumer long-distance market, packaging its long-distance with such services as PCS wireless and Internet services.

"It is going to be much more a locally oriented market with long-distance and other things as components," LeMay said.

Fundamental changes are occurring in the market and the question, analysts said, and Spring must react.

"The company has to either go it alone and fill in all of their weak spots or be acquired," said Jeff Kagan, a telecommunications industry analyst based in Atlanta.

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