CenturyLink Purchases Level 3Damien Moye
There is another tech merger to report. Internet service provider CenturyLink purchases Level 3. Level 3 is also an ISP and telecommunications provider. What does this mean?
As a result, this merger means competition for AT&T. After AT&T’s merger, they really need competition right now. But how much will this cost CenturyLink? Consequently, this will cost them $34 billion in cash and stocks. This deal will also pay off all debts. Furthermore, this deal equips CenturyLink to handle heavy, heavy online traffic. That’s critical for their business customers.
Level 3 stocks soar. At 1 pm Thursday, their stocks stayed around $47. The last time I checked the ticker, Level 3 stock was above $56 a share. Over the past decade, both spent billions on acquisitions of other corporations. Such corporations include Quest, Global Crossing and TW Telecom Inc. And another thing…Level 3’s clients include Netflix and Google. So CenturyLink will get some very important clientele. In addition to that, CenturyLink gets $10 billion in tax credits. Who doesn’t like tax credits? But all the news isn’t good. While Level 3’s stock soars, CenturyLink stock declines. At 4 pm Friday, CenturyLink stocks held at $30.39 a share. As of 11am Monday, October 31, stocks struggle to make $26.70 a share.
This tells me several things. This tells me the company being bought out actually holds the cards. It’s usually the other way around. Usually, the company doing the buying has most of the power. But here, it’s the other way around. Notice it’s Level 3, not CenturyLink, that has the big clients, like Netflix and Google. Then, notice it’s Level 3’s stock that’s going up. Let’s face it…CenturyLink needs Level 3 way more than CenturyLink needs Level 3. But I am happy this is going to give AT&T the competition we consumers deserve. That’s the glory of a free market enterprise system. Competition keeps corporations in check. It keeps people accountable. I’m not a big merger fan, but I am happy about this one. What do you think of CenturyLink purchasing Level 3?