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Verizon Will Delay Wireless Spinoff

October 17, 2000|From Times Wire Services

The plunge in many tech and telecom stocks has claimed another victim: Verizon Communications said Monday it will delay the planned initial stock sale for its Verizon Wireless venture with Vodafone Group.

"Recent volatility of capital markets has created an environment in which it is prudent to defer the offering," Verizon and Vodafone said in a statement. The companies didn't say when they expect to complete the sale.

Verizon Wireless, the largest U.S. wireless company, was formed in April when Bell Atlantic Corp. combined its U.S. wireless operations with those of Vodafone. GTE Corp.'s wireless properties were added in June, when Bell Atlantic bought GTE and changed its name to Verizon.

The sale of shares in Verizon Wireless was expected to raise$5 billion, the company said in an August filing with the U.S. Securities and Exchange Commission. Earlier estimates had placed the value as high as $15 billion.

Verizon Communications shares (ticker symbol: VZ) fell 6 cents to $46.44 on Monday. Vodafone (VOD) lost 88 cents to $37.50.

Verizon Wireless needs cash to buy new airwaves that will be sold in two government auctions to offer advanced services such as fast Internet access from cellular phones.

"They're not in a rush to get the money," said Jennifer Murtaugh, a wireless analyst at First Union Securities in Chicago. Because of Verizon Communications' good credit rating, the wireless venture could raise debt at favorable rates, she said.

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Down to the Wire

Wireless communications stocks such as Vodafone, Sprint PCS and Nextel Communications have plunged since spring, as investors fret about the industry's long-term growth prospects.

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Weekly closes and latest for the Barclays index of 21 major wireless stocks

Monday: 390.09

Source: Bloomberg News

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