Steve Mehs
02-24-03, 03:35 AM
Pegasus' stock may have climbed near $20 a share last week, but Wall Street is still bearish on the company and its future.
The company's high leverage, troubled growth outlook and uncertain future were all listed as concerns by Lehman Brothers satellite analyst William Kidd, who reiterated his "underweight" rating on Pegasus stock Friday. Pegasus sells DirecTV in rural areas through its National Rural Telecommunications Cooperative affiliates.
Pegasus' continuing litigation also is an issue, Kidd said.
While a takeover of the company is possible, "we believe that Hughes and Pegasus remain far apart on price," Kidd said. "While both want to avoid litigation, litigation may be the only way of clarifying whose perception of value is right."
On Friday, Reuters speculated that the recent rise in Pegasus' stock may be tied to a pending acquisition. Pegasus, which authorized a reverse stock split earlier this year, has seen its shares steadily rising in the past few weeks. Shares closed unchanged at $19 on Friday.
Said Pegasus spokesman Andrew Smith, "We are currently in mediation to settle our litigation. Settlement could take any form including settling the individual issues that are the subject of the litigation or anything else, which could include a merger or an acquisition."
A federal mediator is facilitating talks between the companies. A trial date for the matter is scheduled for June 3.
The company will announce fourth quarter and 2002 results Thursday.
From SkyReport (http://www.skyreport.com/skyreport/feb2003/022403.shtm#one) (Used with Permission)
The company's high leverage, troubled growth outlook and uncertain future were all listed as concerns by Lehman Brothers satellite analyst William Kidd, who reiterated his "underweight" rating on Pegasus stock Friday. Pegasus sells DirecTV in rural areas through its National Rural Telecommunications Cooperative affiliates.
Pegasus' continuing litigation also is an issue, Kidd said.
While a takeover of the company is possible, "we believe that Hughes and Pegasus remain far apart on price," Kidd said. "While both want to avoid litigation, litigation may be the only way of clarifying whose perception of value is right."
On Friday, Reuters speculated that the recent rise in Pegasus' stock may be tied to a pending acquisition. Pegasus, which authorized a reverse stock split earlier this year, has seen its shares steadily rising in the past few weeks. Shares closed unchanged at $19 on Friday.
Said Pegasus spokesman Andrew Smith, "We are currently in mediation to settle our litigation. Settlement could take any form including settling the individual issues that are the subject of the litigation or anything else, which could include a merger or an acquisition."
A federal mediator is facilitating talks between the companies. A trial date for the matter is scheduled for June 3.
The company will announce fourth quarter and 2002 results Thursday.
From SkyReport (http://www.skyreport.com/skyreport/feb2003/022403.shtm#one) (Used with Permission)