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Telecom & Wireless

Level 3 Hits 52-Week Low As Wall St. Ponders Telecom

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By Douglas A. McIntyre Updated Published
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24/7 Wall St. mentioned a few days ago that Level 3 (LVLT) has traded off sharply this year, probably due to its huge level of junk debt. The company has been able to push out the maturity date on some of the debt, but LVLT is still struggling with cash flow.  The shares hit a new 52-week low today trading at $4.41, down from their 52-week high of $6.80.

The Alcatel-Lucent (ALU) debacle has Wall St. taking a look across the entire telecom and telecom equipment sector. Another weak player, Nortel (NT), is taking a beating. Motorola (MOT), which has a large telecom equipment division, is also off.

On the other hand, the companies that own the phone systems and have ALU, MOT, and NT as suppliers are up. AT&T (T)  and Verizon (VZ) are both up about 2%. Both trade very near 52-week highs.

Looking at the landscape, investors appear to be saying that in telecom equipment, it is better to be a buyer of equipment than a seller, it is better to have the consumer and not the enterprise as a customer, and it is best to stay away from segments of the industry that are becoming commodities.

Douglas A. McIntyre

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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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