XO Communications Another Round of Tough Times on the Horizon
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XO Communications has seen both bad times and rescue. In January 2003, financier Carl C. Icahn bought the Reston voice and Internet services operator out of bankruptcy. In July, Icahn personally bought about $395 million of debt coming due, cleaning up the firm's balance sheet and leaving around $300 million in cash.
Yet Icahn, the company's chairman and a majority stockholder, cannot prevent today's economic doldrums from filtering down to the company.
A spokesman said XO has seen some weakness among small business clients, though it hasn't lost any big clients. That's been the case for many telecom companies, especially firms with less than 100 employees. (They tend to be most vulnerable to tighter credit markets and recessionary pressures.)
XO is expected to report its third-quarter results on Nov. 10, when investors will get a better sense of business prospects going forward.
The company was founded by telecom veteran Craig McCaw and born during the telecom bubble of the late 1990s. It was also a casualty of the bubble bursting and forced to go into Chapter 11 reorganization. XO has since struggled to compete with larger telecommunication companies for clients.
Its stock, which trades over the counter, has dropped about 80 percent from a 52-week high of $3.69 to around 17 cents a share.
