Nextel Communications traded down from 86 1/4 to 84 1/2 last week amid mixed market feelings. Buyers and sellers could not be determined. Falling from the 89-90 range earlier this month, the liquid name has begun to crossover to the distressed side. Some traders defend Nextel, speculating that dealers have been unloading the paper to purposely push the price down. But others point to equity and bond prices, which have also experienced dips.
There are two distinct camps on Nextel, an old-timer in the secondary loan market. Its backers say it gets unjustifiably painted with the same broad brush of other telecoms and wireless names. Market players less-than thrilled with the name say the reason for the broad-brush splash is because it is deserved. Nextel, they claim, suffers from some of the same issues that have plagued its competitors, namely the need for continuing capital expenditures under operational constraints.
Overall wireless names have been softer, according to dealers, because of weak subscriber numbers. Smaller names are following the lead of the sector's larger players. Leap Wireless, for example, traded from the 72-74 range down to 70 last week. One dealer explained that Nextel always swings too far, meaning that when wireless gets soft, Nextel gets even softer.