Qwest Communications International Inc. chief executive Joseph Nacchio smelled blood in the water when he noticed that Wall Street didn't seem happy with the planned merger of Global Crossing Ltd., US West Inc. and Frontier Corp. The market, which generally loves almost everything Global Crossing does, responded to the proposed $52 billion package of mergers by initially driving down the price of Global Crossing shares.

That was partly what prompted Nacchio, a former AT&T Corp. executive, to take on fellow AT&T alumnus Robert Annunziata and try to grab US West and Frontier for himself. And yesterday Qwest stock took a big hit, dropping nearly 24 percent after the Sunday announcement of its offer. It fell $10.75 to close at $34.12 1/2.

"Wall Street was not looking at this too favorably," said Gail Jones, a senior analyst with the Yankee Group.

The $87 billion company that Nacchio hopes to create would transform Qwest -- the Denver-based, hot growth company that sells long-distance and data services to business -- into something that looks a lot more like a mainstream telephone company, with millions of local customers in 14 western states.

Nacchio sent offers to the heads of both US West and Frontier on Sunday, outlining a pair of mergers that could be accomplished separately but would be somewhat sweeter if taken together -- worth $66.4 billion in cash, equity and assumed debt, according to Qwest's calculations.

The bold move is characteristic of Nacchio's leadership, which has built Qwest into the the nation's fourth-largest long-distance provider, with revenue of $2.2 billion and a loss of $844 million last year. The company has built an ambitious fiber-optic network covering nearly 19,000 route miles and has embarked on building a network of more than 9,000 miles in Europe.

The company's domestic fiber-optic lines got their start largely along railroad rights of way obtained by principal shareholder Philip Anschutz, who acquired Qwest Communications Corp. in 1995 and took that name for his growing company. Qwest went on a buying spree after hiring Nacchio from AT&T in 1997, buying long-distance provider LCI International Inc. for $4.4 billion in 1998.

But while the firm's rapid expansion thrilled investors, Jones said, there was a hole in its strategy: "They recognized that they needed that last-mile connection" to consumers.

That local connection is important to Global Crossing, too, said Anna-Maria Kovacs, a telecommunications industry analyst with Janney Montgomery Scott Inc. So, "for both sides of either transaction, there's a lot of strategic sense."

If so, then, why has Wall Street reacted with boos? To some extent, the companies are talking about changing what made them highfliers in the first place, said analyst David Barden at J.P. Morgan Securities. Global Crossing and Qwest both pride themselves as being nimble companies unencumbered by the burdens of providing local phone services.

US West, a former Bell company, is seen as a mature creature and somewhat lumbering by comparison, Barden explained. To have CEOs such as Nacchio and Global Crossing's Gary Winnick now tell shareholders, in effect, "You might not be aware of this, but we really needed to be big . . . to be worth what we're worth" is a "very Kafkaesque" transformation, Barden said. Shareholders might well be asking, "Does that mean the whole model you sold me before isn't working anymore?" Barden said.

Global Crossing issued a feisty response yesterday to the Qwest attempt to break up its merger plans. "Our existing US West merger agreement is superior to Qwest's offer, and we fully expect to close it as planned next year. Our existing Frontier merger agreement is also superior to Qwest's offer, and we expect to close it as planned in the third quarter of this year," the company's statement said. Global Crossing also noted that the planned purchase of 39 million Global Crossing shares by US West at $62.75 per share was still scheduled to occur at the end of this week.

US West, however, was not dismissive in its comments. "We have received the offer from Qwest, and our board will review it in due course. But we cannot provide any further comment at this time," a company spokesman said.

The biggest problem for any acquirer, Jones said, is the vastness of the West itself; aside from the attractiveness of cities such as Denver, the widely dispersed rural customers present a challenge to anyone who wants to connect with them. "To serve that territory is sometimes a challenge," Jones said. "You've got to wonder how Qwest is going to be able to take that and turn it around."

The attempted takeovers are part of a new telecommunications environment in which small fish gobble up big fish and fight over the spoils: Companies such as Mississippi-based WorldCom Inc. buy long-distance giant MCI Communications Corp., and Qwest takes over LCI.

"A year ago I think this would have been really startling," Kovacs said. "We've seen it so many times now, it's become less unusual."

Qwest's daily closing stock prices

Wall Street seems skeptical of Qwest's move -- the stock fell 24 percent yesterday (US West rose 5.7 percent and Frontier rose 3.5 percent).

About Qwest

Business: Offers local and long-distance phone, Internet and multimedia services to businesses and consumers in the United States. Also sells capacity on its network to other providers.

Based: Denver

Employees: 8,700

Web address: www.qwest.com

Qwest's network: Is nearing completion of an 18,815-mile fiber-optic network connecting 150 cities. Cables under the Atlantic connect it to Europe.

1996: Joseph Nacchio becomes Qwest's chief executive and president.

1997: Qwest goes public.

1998: Buys Phoenix Network, a long-distance reseller, for $27 million.

Buys EUnet International, an Internet service provider based in Amsterdam, for about $155 million.

Buys LCI International, a long-distance provider, for $4.4 billion (LCI itself had bought up many companies).

1999: Buys Icon CMT, which provides Web-based applications for businesses.

Sunday: Offers to buy US West and Frontier in an attempt to thwart Global Crossing's planned merger with the two communications companies.

SOURCES: Qwest, Bloomberg News, Hoover's

CAPTION: Qwest's chief executive and president Joseph Nacchio