| BUSINESSWEEK ONLINE : DECEMBER 14, 1998
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| INSIDE WALL STREET
AT&T Could Bring New Zing To TCI It isn't at all certain that AT&T's proposed acquisition of Tele-Communications (TCOMA) will get government approval: Some fear that the merger may harm competition in telephone, video, and data services. Skepticism about the deal has restrained TCI's price advance--from 32 in mid-June to 41 currently. So why is investment manager Ken Schapiro loading up on TCI? There is only a modest downside risk if the merger fails--and a gigantic gain if it passes muster, says Schapiro, president of Condor Capital Management, which focuses on large-capitalization technology stocks. If the deal fails, ''you're still left with a premier player in cable and the Internet,'' says Schapiro. TCI is the second-largest cable operator in the U.S. and has been spending big to develop new services--including digital cable, which will provide Internet access and phone service over cable-system lines. ''TCI's digital cables provide more bandwidth than Baby Bell technology,'' he says. Besides, he adds, cable is red-hot, and ''we're sure another suitor will emerge should AT&T fail to bag TCI.'' But if the deal is approved, ''you get AT&T stock at a 15%-to-20% discount, depending on TCI's stock price,'' notes Schapiro, who thinks that AT&T under CEO Michael Armstrong will be flying high. With TCI, AT&T would be able to offer local phone service and Internet access over TCI's cable lines, which are 100 times as fast as conventional dial-up modems, says Schapiro. He thinks that by mid-1999, TCI stock, now at 41, will hit 55. BY GENE G. MARCIAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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