MCI (MCIP) in Merger Talks With Qwest

Stock of the Day Newsletter -- 2/3/2005 Sponsored by: Schwab Active Trader

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Stock of the Day MCI (MCIP) MCI in Merger Talks With Qwest In what could be the telecom industry's second blockbuster merger in a week, MCI, the No. 2 U.S. long-distance telephone company, was revealed to be in talks with Qwest Communications International. According to sources familiar with the matter, Qwest offered $6.3 billion for the company with which Verizon has already had preliminary merger talks. Daily Chart If you are not able to see the chart, your email client probably does not support javascript. To view it, please click here Today's issue is sponsored by Schwab Active Trader: Get 30 commission free trades when you open a new Schwab Active Trader Account. Online Equity Trades for $9.95 with advanced Charts, streaming tools and Active Trader Research. It’s everything the active trader wants and then some. Click Here: http://www.investorguide.com/1/SchwabActiveTrader.htm Stock Analysis Ashburn, Virginia-based MCI emerged from bankruptcy last April, changing its name from WorldCom in the process. Although it has been looking for a buyer since then, interest in the long-distance carrier intensified after leader and rival AT&T agreed last week to be acquired by SBC Communications. MCI would give Denver-based Qwest, the No. 4 local-phone carrier, access to a global long-distance phone and Internet network spanning 98,000 miles in six continents. Buy MCI for just $4 MCI used its national networks to serve the high-spending corporate customers but has been suffering as demand and prices slumped. Qwest would benefit from the merger as it would be acquiring a company with a much better balance sheet. Qwest is already burdened with $17.2b in debt, and would benefit from MCI's cash flow. The latter generated $20b in sales and has $5.6b in cash, according to estimates. Make MCI your first of 30 commission free trades when you join Ameritrade Industry stalwart Verizon is also reportedly in talks with MCI, while Mexican billionaire Carlos Slim, MCI's biggest individual investor, is also considering a plan to take MCI private. Slim owned a 13.4% stake in the company as of last April. Last year Leucadia National, owner of long-distance provider WilTel Communications, considered a bid before selling its shares in the company. Many believe the bartering between MCI and Qwest may be a ploy by the former to attract more interest from Verizon and BellSouth, and start a bidding war. Enter Schwab Active Trader. Get 30 commission free trades. MCI and Qwest have both been tainted by scandals in the collapse of the telecom bubble. MCI was forced into bankruptcy in 2002 after an $11b fraud, while Qwest CEO Richard Notebaert agreed in October to pay a $250 million fine to resolve probes by U.S. regulators. Having spent the last three years resolving accounting missteps, it seems a good time for them to talk of getting together. In an industry where bottom-line growth is stagnant, a merger may be just what the doctor ordered to squeeze out costs. MCI has already done a commendable job since its bankruptcy days, slashing 18,000 jobs, and cutting down $41b in liabilities to just about $5.7b in debt. Despite its reputation being scarred from the accounting fraud, MCI is still very attractive for its national network infrastructure and roster of corporate clients. Marrying the two companies would ease the price wars, and perhaps continue the recent wave of telecom mergers. With so many potential suitors, MCI could soon be in the middle of a heated bidding war, and promises to be an exciting stock to watch. Special Offers Buy MCIP for just $4 Brown|Co. MCIP $5 trades! Profile MCI, Inc., whose predecessor was WorldCom, Inc., is a global communication company, providing a range of communication services in over 200 countries on six continents. It operates a communications network that is composed of approximately 100,000 route miles of network connections linking metropolitan centers and various regions across North America, Europe, Asia, Latin America, the Middle East, Africa and Australia. It owns an Internet protocol backbone and is a carrier of international voice traffic. Since April 2003, its business has been conducted using the brand name MCI. The Company operates primarily through three business units: Business Markets, Mass Markets and International. On April 20, 2004, WorldCom merged with and into MCI, as a part of transactions contemplated by a Plan of Reorganization of WorldCom and certain of its subsidiaries under chapter 11 of the United States Bankruptcy Code.			Our Sites WiserAdvisor InvestorGuide InvestorWords WebFinance Consulting Market Overview (As of 3:59 PM EST) DJIA 10,593.02 -3.77 S&P 1,189.90 -3.29 NASDAQ 2,057.64 -17.42 10Yr 4.163% +0.02 More market statistics Other Stocks Research Enter Ticker:  Most Viewed:  THQI, GE, SIRI, ADCT, MSO Your personal research page Enter Schwab Active Trader. Get 30 commission free trades. www.schwabat.com Buy MCI for just $4 www.sharebuilder.com Options Trading Hammered by the market? Protect your portfolio with options! www.optionsxpress.com Brown|Co. Trade MCI your way. Get $5 trades and low margin rates. No hidden fees. Apply now. www.brownco3.com Last 5 Stock of the Day Newsletters THQ (THQI) American Express (AXP) Eastman Kodak (EK) SBC Communications (SBC) Nokia (NOK) See the Complete Archive Here!

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