Level 3 Communications (LVLT) today named Jeff Storey as its President and COO, finally replacing Kevin O’Hara who left in March. Followers of the sector will recall that Storey was the President of WilTel Communications while it was under the wings of Leucadia National Corporation. Level 3 needed some more operational muscle to help it break out of the rut it has been in for a year, it’s good to see them fill the COO position at last.
At WilTel, Storey won praise for his role in turning around the company’s operations despite starting with a very weak hand. WilTel had basically no metro footprint, just a longhaul network with low gross margins that was burning through cash very quickly even after emerging from bankruptcy. But their operations grew healthier each and every quarter thereafter. Of course, WilTel was also dependent on its large outsourcing contract with SBC, and when SBC bought AT&T it all fell apart and WilTel had little choice but to find a buyer while it could. Storey basically vanished from the telecom scene for the last few years, but he’s back, and some might argue he is now in the position of successor to James Crowe.
Good luck to Jeff in his new position! I’d say that it’s tough to start in this sort of environment, but starting at the darkest part of a recession is actually something he has done before.
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It can’t hurt that he actually has some experience with WTEL. So he’s not coming in 100% cold.
I heard that Hobbs is out already, and I think we all know why someone from Leucadia is there … gulp.
I think there is a distinct possibility that Storey is in line to replace Crowe. I suppose the real question now is what will be the direction: chop off assets and concentrate on core, trim and sell, or simply sell it all. I sure hope someone can throw a few photons on an answer.
I think that answer depends entirely on the large shareholders of LVLT. At the moment though, there just aren’t any viable buyers out there. So it seems likely to me that they just continue to implement Unity for now.
with Luecadia history and there guy now in charge at Level 3 what would another foray into telecom potentially look like in your opinion for them.
If Leucadia were to re-enter telecom, they would likely do it by enabling some sort of M&A. For instance, in the example here Leucadia could buy preferred or converts from LVLT to enable them to buy GLBC or XO, thus gaining them a large equity stake in an increasingly viable company at the nadir of a market slump.
Personally I don’t expect them to try it, but if they did then I think that’s what it would look like.
anyone been able to confirm that hobbs is out?
I have heard nothing on the subject beyond the comment left earlier by iSiS. I would be somewhat surprised though if Hobbs were gone as part of Storey coming in – they deliberately left the COO/Pres role open so they could just fill it.
Any validity to BTC going after Level 3
That’s been an ongoing rumor for about four years now with nothing happening, I haven’t heard anything has changed but you never know I guess.