According to Wall Street analysts, the sell-off in telecom equities triggered by revelations of lead-sheathed cables used in phone networks would likely continue to weigh shares of AT&T (T) and Verizon Communications (VZ). T stock, VZ stock, Lumen Technologies (LUMN), and Frontier (FYBR) all lost $18 billion in market value last week.
According to experts, making regions safer may cost tens of billions of dollars. Before the 1960s, the majority of lead-sheathed wires were placed in phone networks.
“We could see what amounts to a general telecom buyer’s strike for some time,” wrote SVB MoffettNathanson analyst Craig Moffett in a client note Monday. Even if T stock and VZ stock provide appealing dividends, telecom companies may be in the doghouse for a time, according to Moffett.
“Investors are more likely to shoot first and ask questions later,” he says. “After all, none of these are stocks with outsized growth stories.”
T shares declined 6.7% today to settle at 13.53 on the stock exchange. VZ shares fell 7.5% to 31.46. LUMN shares fell 8.1% to 1.70. In addition, FYBR shares fell 15.8% to 12.05.
The Wall Street Journal revealed this week that telecom firms put potentially hazardous lead-covered wires aloft on poles, in the soil, and underwater. According to the Journal, they will most likely need to take efforts to make regions ecologically safe.