Rodent Regatta

Level 3 Communications of Broomfield, CO announced a profit for its first quarter. Yesterday, the stock jumped from $5.88 to $6.26, a one-day jump of 6.5%. The profit largely resulted from one-time items related to restructuring some customer contracts.

On October 5, 2001 the company closed at $1.98 per share – down from its all-time high of $130 per share on March 10, 2000, the day the Nasdaq peaked. Had you invested $10,000 last October 10th, your investment would have been worth $31,616 at last night’s close. That’s an annualized return of better than 102%. No company will return that over a long period of time.

As one of the survivors of the telecom/dotcom meltdown, Level 3 is well-positioned to benefit handsomely from further turmoil among telecom companies and the future uses that we’ll have for high bandwidth telecommunications services.

• * * UPDATE * * * Following Tuesday’s (4-23-03) big jump, Level 3 managed to fall to $5.84 yesterday (4-24-03), a drop of 6.7% It’s tough in telecom!

For those who are interested, on March 10, 2000 Berkshire Hathaway closed at $40,800 per share. The stock had declined from an all time-high of $84,000. Warren Buffett commented in the 2001 Annual Report this way:

Here’s one for those who enjoy an odd coincidence: The Great Bubble ended on March 10, 2000 (though we didn’t realize that fact until some months later). On that day, the NASDAQ (recently 1,731) hit its all-time high of 5,132. That same day, Berkshire shares traded at $40,800, their lowest price since mid-1997.

Note, at the time of his comment, the NASDAQ had been around 1,731. It closed yesterday at 1,466 and that’s up 5.87% for the year.