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Telecom & Wireless

Level 3 Won’t Stop Falling

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By Douglas A. McIntyre Published
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Shares in Level 3 (LVLT) won’t stop falling. The stock is down almost 25% in the last six moths with most of that slide coming since early July.

LVLT seems to be in a great business. It provide a huge highway for the delivery of internet data, video, and voice. In the last reported quarter, LVLT revenue moved from $819 million to $1.035 billion. The company’s net loss was flat at just over $200 million. Acquisitions played a part in the revenue improvement.

What Level 3 has that Wall St. does not like is boat loads of high yield debt, over $.6.8 billion. And, the company is not exactly throwing off a lot of cash.

High yield debt was in favor until a couple of months ago, but that has changed considerably. Even relatively attractive private equity deals are having immense problems getting funded. That makes the market cast a jaundiced eye toward a company like Level 3.

If earnings and cash flow are not good in the current quarter, LVLT could end up with very few supporters.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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