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Verizon Wireless Plans Huge IPO

August 25, 2000|From Bloomberg News

Verizon Communications' (ticker symbol: VZ) Verizon Wireless Inc., the No. 1 U.S. mobile phone business, filed Thursday to go public in what would be one of the biggest initial stock sales ever.

The Bedminster, N.J.-based wireless unit, which has more than 25 million customers, gave a preliminary assessment in a filing with the Securities and Exchange Commission that the initial public offering could raise $5 billion, making it the third-biggest IPO in U.S. history. The IPO's value could grow, though, as earlier estimates put the stock sale at as much as $15 billion, which would surpass the U.S. record $10.6-billion first-time sale by AT&T Wireless Group (AWE) in April.

Investors are being offered a stake in a nationwide digital wireless network that brought in $13.5 billion in sales last year, followed by $7.3 billion in the first half of this year, the filing said. Verizon Wireless also said it is basing future growth on high-speed data services, bringing the Internet to mobile phones--an area where one telecommunications investor and analyst said the company has a technological advantage over rival AT&T.

"They are arguably the best wireless play in the U.S.," said Jean-Marc Berteaux of John Hancock Funds, a money manager owned by John Hancock Financial Services Inc. of Boston. Some investors in AT&T Wireless or Sprint PCS (PCS) could be tempted to shift money into Verizon Wireless, he said.

Verizon Communications agreed on a contract Wednesday to end a strike by Communications Workers of America members. The company's shares rose $1.13 to close at $41.63 on the New York Stock Exchange, though they have declined 18% since the Bell Atlantic purchase of GTE closed June 30, forming Verizon.

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