Business briefs for April 12, 2002

Friday, April 12, 2002 | 11:10 a.m.

Shares drop

KANSAS CITY, Mo. -- Shares of Sprint Corp.'s PCS Group, the No. 4 U.S. wireless-phone company, fell 13 percent Thursday because of concern about the creditworthiness of some customers, analysts said.

Shares of the Overland Park, Kan.-based company -- in the Kansas City area -- fell $1.39 to $9.23. The stock rebounded this morning, rising 62 cents. But the shares have declined 62 percent in the past year amid slower subscriber growth.

Sprint PCS sells to customers with lower credit ratings through its ClearPay program, which doesn't require a deposit for service. The program suspends service if ClearPay customers' unpaid bills exceed a preset limit.

"There are continued concerns about the quality of Sprint PCS's subscriber base," Frank Marsala, a Robertson Stephens Inc. analyst, said.

Legg Mason Wood Walker Inc. estimates that in recent quarters, as much as 70 percent of new Sprint PCS customers signed on through ClearPay, said analyst Craig Mallitz.

Board meetings continue today

Leaders of the Medical Liability Association of Nevada and Nevada Division of Insurance met Thursday in Las Vegas and Carson City to discuss several administrative issues associated with the state's plan to provide temporary malpractice insurance to Nevada's medical personnel.

They were scheduled to meet again today.

Among other items, the board was expected to name the American Governmental Risk & Insurance Programs (AMGRIP) as its management company in today's meeting. It also hoped to draft and adopt a plan of operation as well as sign an agreement that would classify the association as an independent service provider for the state Insurance Division.

The state has required the Medical Liability Association of Nevada to offer initial coverage beginning Monday, when the current insurance policies of many local doctors are set to expire.

LV firm taking new name, stock symbol

Mego Financial Corp., parent operation of a Las Vegas company that develops and sells timeshare resort properties, is changing its name to more accurately portray its business.

The publicly traded company announced today that it is changing its name to Leisure Industries Corp. and that as of Monday, its MEGO stock ticker symbol on Nasdaq will change to LESR.

The company also will change the name of a wholly owned subsidiary working exclusively with timeshare homes, Preferred Equities Corp., to Leisure Homes Corp.

"Our new name is more demonstrative of our business and strategy and, along with the formation of Leisure Services, illustrates our focus on becoming a leading provider of resort and vacation solutions,"said Floyd Kephart, chairman and chief executive officer of the company, in a statement issued today.

The company, which has developed Ramada Vacation Suites properties in Las Vegas, last month announced that it is acquiring Houston-based Raintree Resorts International Inc.

Company seeks reverse stock split

NEW YORK -- AT&T Corp., one of the most widely held stocks in the U.S., plans a 1-for-5 reverse share split after the company completes the sale of its cable-television unit later this year.

AT&T's shares outstanding will fall to 709 million from 3.55 billion. Excluding the cable-TV unit, AT&T Broadband, each AT&T share is valued at $4.40 based on Wednesday's price. The stock split would push that price to $22.

Shares of New York-based AT&T have fallen 71 percent from a high of $49.77 in January 1999. AT&T, which has 4 million shareholders, has not done a reverse stock split in at least 51 years.

Wholesale prices up 1 percent in March

WASHINGTON -- Wholesale prices shot up 1 percent in March, lifted by the biggest jump in gasoline costs in nearly three years.

The big advance in the Producer Price Index, which measures inflation pressures before they reach consumers, comes after wholesale prices edged up 0.2 percent in February, the Labor Department reported today.

In another report, sales at the nations retailers rose a modest 0.2 percent in March for the second month in a row, the Commerce Department said.

Shares rebound after SEC inquiry

NEW YORK -- Shares of IBM Corp. rebounded in extended trading after the U.S. Securities and Exchange Commission said it had opened and then closed an inquiry of the computer maker.

An SEC spokesman said after the close of trading Thursday that the agency had opened an inquiry and "closed it without action shortly thereafter."

In after-hours trading, IBM shares regained some of the day's losses, bouncing back 3.8 percent, or $3.18, to $87.37.

Earlier Thursday, IBM's stock plunged after the release of the article, published by SEC Insight, a research firm that scours the SEC for word of investigations. IBM shares ended the regular session down $4.82 at $84.19 on the New York Stock Exchange.

Airline raises $158.5 million in IPO

NEW YORK -- JetBlue Airways Corp., the 2-year-old discount airline, raised $158.5 million in its initial public offering after twice boosting the sale to meet demand from investors.

New York-based JetBlue sold more shares at a price higher than it was seeking. The airline sold 5.87 million shares at $27, up from the 5.5 million shares at $25 to $26 it was offering. The public now owns about 14 percent of the company.

The airline has lured customers with new planes, leather seats, reliable service and inexpensive coast-to-coast fares starting at $114 each way. It enticed investors today with promises of increasing earnings and steady expansion into new markets.

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