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.

News Around the Web