AT&T Wireless (AWE) has slipped into reverse, but its investors are keeping their eyes on that $41 billion Cingular prize.Shares of the Redmond, Wash., wireless-service provider actually rose 1% Tuesday after AT&T Wireless conceded it had
The tailspin further intensified as new number portability rules allowed customers to take their phone numbers to other telcos. But industry observers say the mismanagement may have actually helped salvage the company. The poor performance eventually caused the board of directors to place the company on the auction block. And, after some 11th-hour bidding, AT&T Wireless was able to secure an offer from deep-pocketed Cingular, a joint venture of SBC ( SBC) and BellSouth ( BLS). The deal, when completed, will catapult Cingular past industry leader Verizon Wireless. Though AT&T Wireless shares rose Tuesday, they remain below the deal price. That suggests that investors are confident but not certain the deal with go through as priced. To be sure, the buyout contract commits both parties to the deal. But SBC and BellSouth shareholders could argue that AT&T Wireless has fallen in value and urge Cingular to reprice the deal. Cingular representatives were unavailable for comment.