Telecom Stock Roundup: Verizon Buys ProtectWise, AT&T's Streaming Focus & More
Zacks Investment Research | Mar 06, 2019 08:13PM ET
In the past five trading days, telecom stocks largely went downhill as optimism over a likely long-term solution to the trade war was marred by legal spats between Chinese telecom equipment manufacturer Huawei and the U.S. and Canadian governments. Moreover, although the United States and China reportedly inched closer to a landmark trade deal, the industry awaited further clarity regarding the fine prints and its domino effect. To add to woes, uncertainty in the domestic market crept in with the Democrats aiming to reinstate the repealed ‘net neutrality’ rules.
With significant headway in the bilateral trade negotiations, President Trump has dropped plans to raise the tariff rate on $200 billion worth of Chinese imports from 10% to 25%. A formal agreement to end the trade skirmishes is likely to be inked at a probable meeting between the top leaders of both the countries in late March. In the meantime, efforts are being made to resolve some lingering issues on China’s subsidies, cyber theft, public sector enterprises and so-called forcible technology transfers. However, with no official statements, the industry awaits further clarity on policy issues and its aftereffect. Moreover, ambiguity prevailed about whether or not a deal will be signed with Trump predicting that there would either be a “good deal” or “no deal at all”.
On the other hand, tense undercurrents persisted as Huawei sued the Canadian government, its border agency and the national police force for unlawful detaining, searching and interrogation of its CFO Meng Wanzhou. In a suit filed in the British Columbia Supreme Court, the lawyers appearing for Meng alleged a political conspiracy to undermine the meteoric rise of the company and its prowess in the 5G domain. The latest saga was probably triggered by the approval of the Canadian Justice Department to go ahead with the extradition proceedings of Meng. Huawei further upped the ante against the Trump administration by filing a suit in the U.S. District Court in Plano, TX, challenging its authority for barring federal agencies from buying Huawei equipment and services without any valid evidence against any wrongdoing.
Meanwhile, Democratic lawmakers have introduced bills in both the House and Senate to reinstate the net neutrality rules that the Federal Communications Commission had repealed in 2017. Titled ‘Save the Internet Act’, the bills aim to discourage blocking or throttling content and consider Internet access as a “utility” under Title II of the Communications Act. Although the bills are likely to pass the House, stiff resistance is expected in the Senate where Republicans hold the majority. Moreover, the bills are likely to be vetoed by Trump as he had been vocally skeptical of net neutrality in the past, further blurring the prospects of a smoother sail.
Get The News You Want
Regarding company-specific news, acquisitions, strategic restructuring, collaborations and earnings primarily took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. In a concerted effort to expand its product offering and augment cybersecurity platform, Verizon Communications Inc. (NYSE:VZ) has completed the acquisition of ProtectWise, Inc. for an undisclosed amount. The transaction is likely to facilitate Verizon to build an ecosystem that enables superior endpoint-to-network visibility and eliminate threats.
Based in Denver, CO, ProtectWise offers cloud-delivered Network Detection & Response to detect and promptly respond to security threats. Seamlessly integrating with other existing security products, it focuses on the network level to observe attacks and trace them back to the source, considerably reducing the time to detect and respond to these. The acquisition will help Verizon to boost its enterprise security portfolio, underscoring the ease and cost-savings of an on-demand deployment model for consolidated multiple, disconnected point products. (Read more: Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.