In the face of a deteriorating economy, PAETEC (PAET) has scaled back plans for its new headquarters building in Rochester, NY. Just four months ago the large CLEC’s plans were for a 37 story monster of a building with luxury apartments above office space, and just two months ago they still said all systems were go. Now they have now settled on a mere 9-10 stories and perhaps a smaller footprint, although they aren’t sure yet.
In a way, it seems a bit silly for CEO Arunas Chesonis spend time worrying about real estate development. I mean didn’t the industry learn anything from the days when Williams Communications built its own monstrosity in Tulsa? Telecom companies ought to spend their time on telecom, and leave the real estate to guys like Donald Trump. But there’s something to be said for community development, even if they did bite off more they could chew.
Perhaps the thing to note though is that the project is going forward at all. If all one looked at was the stock price, which is now just above $1 - I wish I could say ‘hovering’ but these days nothing hovers - one would think the company ought to reconsider. That is down some 92% from over $13 last October. I know their Q2 results sucked, but this is kind of ridiculous, operationally the company is regrouping but they don’t seem to be in any imminent danger.
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