Level 3 (LVLT) announced another deal to further consolidate the telecom industry yesterday. The stock, once again, was up big. Since I began writing about the stock in September of 2005, it is up about 90%.
As a reminder, Level 3 has acquired WilTel, Progress Telecom, ICG Communications and announced the TelCove deal yesterday. This is a classic consolidation of an industry which came out of a bust period. As I wrote in the September 2005 and November 2005 newsletters, IP traffic is growing 70% per year while the demand for oil grows 2 to 3% per year.
With Level 3 up over 90%, investors are beginning to focus on the real growth industry.
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