Qwest (Q) is to small, took sickly, to compete. It does not have the emerging high-speed infrastructure of its larger brothers AT&T (T) and Verizon (VZ). Nor does it have their large wireless arms. VoIP companies as diverse as Comcast (CMCSA) and Vonage (VG) are bombarding the markets with offers for inexpensive, low cost telephone service. Short sellers seem to agree having added 17 million shares to the over 85 million share short position in the company as of mid-January.
Despite all of this, Qwest’s stock is fairly high, up over 40% over the last year. Some of this can probably be attributed to the rise in telecom and cable stocks in general. The huge demands for broadband and Internet-based data, audio, and video has sucked almost all of these shares higher.
But, does Qwest deserve to be up slightly more than AT&T since January of last year? Perhaps not given that it would appear that T has more going for it.
Almost anyone who can is going after Qwest’s big land line business, and, as a result, it is shrinking. But, the company has no plan to fill in the hole.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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