Why is Verizon stock doing so poorly?

Discussion in 'The Okie Corral' started by emt1581, Feb 8, 2010.

  1. emt1581

    emt1581 Curious Member

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    I've had stock in Verizon for 3 or 4 years now and it's done decently even in the recession. However in the past month or two it's gone down significantly. What is going on with them that this is happening?

    Are people going the pre-paid/trac-phone route and dropping out of contracts?

    Is another company stealing the business with something newer and better?

    Thanks!

    -Emt1581
     
  2. TuxthePenguin

    TuxthePenguin

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    They had huge losses this past quarter, I think.
     

  3. grecco

    grecco

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    The cell phone part is doing great,the basic land line phone service is dwindling.
    but the Fios is killing them,
    they only installed 150,xxx net new subscribers.

    Since they have to build everything new, the return on investment is not so good.
     
  4. shavedape

    shavedape

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    I know tons of people that are doing just that. They are tired of being raped for fees and are now being smarter with how they use the phone. My best buddy was one of those guys who loves having all that garbage on his phone but suddenly he's in a tight spot with money and his job like many people so he's cutting back on Verizon.
     
  5. emt1581

    emt1581 Curious Member

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    Yeah, the week after I signed on with Verizon, I saw these ads for $30/mo. unlimited talk/text plans with some pre-paid company. Once I get approved for my home loan I might just cancel Verizon and go with one of those plans providing the reception and actual capabilities are the same as with Verizon.

    Now I've held on to my other stocks that tanked. So I'm not going to pull out just yet. I just hope Verizon wises up and cuts the crap before they go belly up.

    -Emt1581
     
  6. JMS

    JMS 02

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    Cross your fingers that it drops even lower and buy the hell out of it.
     
  7. loki993

    loki993

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    Well if they had it in more than 3 cities, exaggeration but still, it might do better. Seriously though I lived in Florida for 2 years, Tampa had FOIS the whole time and it NEVER expanded anywhere else in Florida.
     
  8. shavedape

    shavedape

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    I know Virgin Mobile reception outshines any of the contract companies around here. My best buddy with Verizon constantly drops calls. Another friend just got the iPhone with ATT and his calls constantly drop. I never have a problem with reception or dropping calls on Virgin Mobile. I know TracPhone users that get great reception too. And the pre-paid companies offer everything the contract companies offer for texting and gadgets and wing dings. You can even arrange monthly payments so you don't have to "top up" but the best part is you can cancel at anytime without penalty.
     
  9. Ender

    Ender ComfortablyNumb

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    Hmmm...

    Verizon stock dropping.

    Verizon getting the IPhone soon?

    Buy Verizon stock just before get IPhone? :supergrin:
     
  10. grecco

    grecco

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    Verizon has very deep pockets, but unfortunately they are at a disadvantage.
    Fios is a good product, but all the infrastucture cost $$$$, so they have been selective in where they are going.

    existing cable companies just need to upgrade thier existing systems to compete, also many cable companies now offer VioP(voice over Ip) phone services.
     
  11. Blitzer

    Blitzer Cool Cat

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    An aside: Tracfone around here rides on AT&T equipment, it is OK.
     
  12. Bilbo Bagins

    Bilbo Bagins Slacked jawed

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    I don't know EMT, maybe we are in a recession or something :whistling:

    I have stock in Comcast and it has lost $3 a share since the beginning of 2010. Verizon has lost $4 a share since 01/01/10.

    :dunno:

    The investment in Fios has nothing to do with it. If it did Comcast stock, one of Fios's biggest competitors, should go up, but it didn't.

    Everyone is seeing cutbacks in American non essential spending, so Cell phone companies, cable, movies theaters, High end resturaunts and retail chains will all get the pinch.
     
  13. 357glocker32

    357glocker32

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    I know that Verizon has recently sold off its Indiana land lines. I believe to Frontier. I dont know if they are doing this nationwide or what, but that could easily have some impact on the stock price.
     
  14. Psychman

    Psychman NRA Patriot Life Member

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    Plus the stock market in general has been doing crappy the last few weeks.
     
  15. robertoh

    robertoh

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    My land line bill was over $600 a year (basic service),went to Traphone and my yearly bill is less than $200 a year. Checked with Verizon and other carriers and I would have to pay over $500 a year. It wasn't hard to make a decision. We aren't phone people and don't hang on the phone all day either.
     
  16. Weiser 878

    Weiser 878 R O C K E R

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    On the wireless side, there are 2 problems:

    First, Verizon doesn't have an iPhone. There have been all these rumors they were getting one (unsubstantiated by Apple, so one must wonder if Verizon isn't the source) and the general public percieves the iPhone as the benchmark so Verizon's lack of one hurts potential customer confidence. Along with this, the phones Verizon pushes as "iPhone killers" aren't selling very well at all compared to predictions.

    Secondly, Verizon's CDMA wireless technology is antiquated. It is far behind the curve for performance, so the company has relied on it's coverage area very heavily as a selling point. Now, Verizon must update their entire network to LTE technology in order to catchup with it's competitors and remain a viable business, effectively rebuilding their entire network. This economic impact is two-fold. One, it's going to be a huge cost to the company because of the labor and hardware that must be expended throughout the country. Second, the coverage Verizon has boasted as a selling point is going to significantly be reduced on next generation phones until the whole nework is switched over, which takes time (look at AT&T's bad press about how long it's taking them to implement 3G nationwide) and Verizon is going to have to operate 2 networks simultaniously, the old CDMA for existing customers and hardware and LTE for new customers and hardware. Additionally, at some point in the next 2 years, every Verizon customer is going to have to purchase a new phone.

    All these things are reflecting a downtrend in profitability for the company. Sure, they will survive, and have every opportunity to thrive, but financially, it's going to be a bumpy road. Expect to see your stock continue to decline, then bottom out when the LTE changeover hits, then come back up as customers adopt the 4th generation technology.
     
  17. marlinfan

    marlinfan

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    LTE is going to be on 700mhz, not on 800mhz where 90+% of Verizon sprectrum is now. The cell phone companies operated the AMPS/TDMA networks alongside 1xCDMA/EvDO networks without any problems for years around the turn of the century. And 1xCDMA/EvDO customers won't HAVE to purchase a new phone within two years, neither technology is near EOL. LTE handsets don't even exist yet, initial consumer products will be aircards.
     
    Last edited: Feb 9, 2010
  18. loki993

    loki993

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    I understand this, I think FIOS is great. But when you look at the map of where its at it doesn't look very promising. I know laying fiber is very expensive, but you cant get people to subscribe to a service that's supposed to be the next big thing if its not available. I think they missed their opportunity with FIOS. They had a period where it was the fastest thing by far. Now it seems that the cable companies are catching up and its probably not even worth it anymore to upgrade. They missed a lot of market share by going slowly with it.
     
  19. Dennis in MA

    Dennis in MA Get off my lawn

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    OK, funny story. I've got a pile of clients who are retirees of VZ. Most of them are rank'n'file guys. MANY of them think that b/c htey worked there, they have or did have inside info. :rofl:

    Best was in December. A client called me. "Buy me $50K of VZ."

    "Dave. I can't think of a worse move for you."

    "Look, it's paying a 6% dividend and they are getting the iPhone."

    "Dave. I highly doubt that."

    "It's true. I heard it."

    "You heard it on CNN."

    "No I didn't."

    "Let me ask you - how much of a price gain did AT&T get by getting the iPhone?"

    "They can't manage squat!"

    "And you love VZ management, right?"

    "No, I can't stand them."

    "So why are we having this conversation?"

    He bot it at $34. It's at 29 now. I guess that dividend sorta vaporized.

    Honestly, there is a lot of good in both VZ and T. I like both companies. But right now, Wall St hates them both. The bad earnings are an aberration. Look at T. P/E is 11. ELEVEN! Get rid of that bad quarter and VZ is at 11 too. Should be 18-20, in my opinion. That's a 50% jump in price. ????

    Specifics on VZ? Ivan never clarified his remarks about selling the entire non-wireless business versus closing down the copper when he runs full fiber. So the speculation is that they may buy out Vodaphone and go 100% wireless. Stupid move on VZ's part. (The non-communication part.) If you are considering that risky of a move, tell people. . . or dont' even mention it.

    If you are in it for the long haul, ignore this. If not, beats the flunk outta me. But I can't see VZ going anywhere bad long-term-ish.