RealTime IT News

Teligent: Back for More Upside?

As with many other stocks early this year, Teligent was riding high. The stock hit $100. And, hey, the company did have incredible partners, such as Liberty Media, Nippon Telegraph and Telephone, and Nortel Networks. In fact, in late 1999, Microsoft and Hicks Muse invested $500 million in Teligent.

But times have changed -- quickly. As of now, the company does not even have a market cap above $1 billion. Currently, the stock is at $15-1/2.

What is the company? Think of Teligent as a comprehensive telecom service provider. Does your business want low-cost, high-quality local or long distance services? Need high speed Internet access? Well, Teligent will provide you the services - all consolidated on one bill. What's more, it does not matter how big your company is.

To provide these services, Teligent has developed technology called SmartWave. With it, Teligent can provide fixed wireless serices using digital microwave communications. Basically, this sends voice and data signals over high radio frequencies. So far, the company has provided its services to 42 markets in the U.S. There are also plans to expand into Germany, Hong Kong and France.

In the second quarter of 2000, the company generated $32.3 million in revenues, which was a 40 percent sequential increase. The local service was up 43 percent and the data/Net revenues were up 77 percent.

However, the losses have been staggering. In the past quarter, they were $164 million. Then again, the company has massive infrastructure costs (capital expenditures were $85 million).

With the stock at low levels, the company's strategic investors are definitely encouraged to jump-start the stock price. In the past year, these investors pumped-in about $800 million, a big part which was at much higher valuations. Also, with the industry undergoing much consolidation, it would not be surprising to see major telecom companies make a bid for the company.