Digest: AT&T expands; XM jumps
EmptyAT&T adds to spectrum
AT&T Inc. agreed to pay $2.5 billion for spectrum licenses that will allow it to expand wireless and high-speed Internet services or add broadcast video in much of its coverage area, the company said Tuesday. Wall Street observers said the telecommunications giant could use the spectrum to beef up its U-verse video service by adding mobile video to its offerings. Analysts also have suggested in recent weeks that AT&T could acquire satellite TV firm EchoStar Communications to jump-start its TV business. Tuesday's deal to acquire the licenses from Aloha Partners Lp., the nation's largest owner of 700 MHz frequency, will give AT&T spectrum covering 196 million people.
Analyst plays up game firms
Citigroup analyst Brent Thill started coverage of video game software publishers Tuesday, with bullish ratings on Electronic Arts and Activision. The industry's long-term prospects, said the analyst, are "so bright that major global media companies like Viacom are scrambling to jump-start gaming divisions." He put a price target of $75 on EA and $29 on Activision. Shares of EA closed up at $59.94 after hitting a new 52-week high of $60.25, and Activision hit a new year-high of $23.58 before closing at $23.55.
XM jumps on higher target
Shares of XM Satellite Radio rose 6.9% on Tuesday to $15.24 after Citigroup analyst Eileen Furukawa raised her price target on the company from $15 to $19.50. Furukawa expects news related to the company's planned merger with Sirius Satellite Radio to drive the stock. She added that a merger of XM and Sirius could result in savings of $7 billion and drive higher advertising revenue for the combined firm. She also said XM's stock reflects a 24% chance that the merger will be approved; she sees a more than 60% chance.