Every time Wall St. looks at Level 3 (NASDAQ: LVLT) it sees promise. The company provides broadband pipes all over the US and some abroad. In a world where high-speed data, video, and voice are powering internet traffic, the shares should be the perfect investment.
But, they aren’t. Over the last year, LVLT is off close to 60%. It is hard to find any other widely-traded stock in that neighborhood.
Level 3 shares were downgraded today, by Morgan Stanley, from "equal weight" to "underweight" In layman’s terms that means sell the shares as soon as possible. According to Reuters the MS research note said "Level 3 expects to generate negative free cash flow in 2008 and remains highly leveraged." The news sent LVLT down another 6%.
Level 3 still has $6.3 billion in long-term debt, and, without any operating profits, it is an unlikely buy-out target.
The two men who run Level 3, James Crowe and Kevin O’Hara have been at the company for almost a decade. The board is made up of retired executives, a former college professor, and an admiral who runs the nominating and governance committees, all asleep at the helm.
Douglas A. McIntyre
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.