Big Mover on the Nasdaq; Towerstream Corporation (TWER)
Online, September 1, 2013 (Newswire.com) - Shares of Towerstream Corporation (NASDAQ: TWER), a provider of broadband services to commercial customers, have risen sharply in trading today. TWER shares have been boosted by M&A news in the telecom sector. The sharp rise in trading today has helped TWER shares break through some key technical levels. Technical indicators suggest that the upward momentum in TWER shares could continue.
Earlier today, two major deals were announced in the telecom sector. Verizon Communications (NYSE: VZ) announced that it will acquire Vodafone Group Plc's (ADR) (NASDAQ: VOD) 45% stake in Verizon Wireless, the joint venture between VZ and VOD. Meanwhile, Microsoft Corp. (NASDAQ: MSFT) announced that it will acquire Nokia Corporation's (ADR) (NYSE: NOK) handset business.
News of the deals lifted shares in the telecom sector, including those of Towerstream Corporation. However, TWER shares are also gaining as the stock's technical indicators are giving bullish signals.
TWER shares have surged after the stock entered oversold territory recently. At last check, TWER shares were up 8.60% to $2.40 on volume of 192,643. The stock broke through $2.30 resistance level earlier in the day. It also broke through $2.40 resistance level before paring some of the gains. The stock's MACD is about to cross over the signal line. This is a strong bullish signal. In addition, the stock is also about to establish a "golden cross", with the 50-day moving average about to cross the 200-day moving average. Once the 50-day moving average crosses the 200-day moving average, there could be significant gains.
TWER shares could break through $2.40 and $2.50 resistance levels in the next few trading sessions. TWER shares could see a pullback from around $2.70. Certainly, there is significant upside potential from current level.
Last month, Towerstream had reported its financial results for the second quarter ended June 30, 2013. For the quarter, the company reported revenue of $8.21 million, compared to $8.10 million reported for the same period in the previous year. The company's consolidated gross margin for the quarter was 35%, compared to 54% reported for the same period in the previous year. Churn rate was 2.37% during the second quarter of 2013, compared to 1.65% reported for the same period in the previous year. ARPU stood at $740, compared to $708.
At the end of second quarter of 2013, the company signed a long-term Wi-Fi lease agreement with a major cable operator. Jeffrey Thompson, President and CEO of Towerstream, said that securing the first anchor tenant for TWER's neutral host network is a major milestone and validates the company's rent-based business model. Thompson further said that the company expects to continue to expand its Wi-Fi customer base over the balance of the year, while preparing for the impending rollout of small cell.
According to Joseph Hernon, CFO of Towerstream, small cell technologies, including Wi-Fi, will allow service providers and platform players to differentiate their offering, add new services, and improve the user experience in dense urban markets where demand levels are pressuring network capacity.
Jeff Williams
http://www.topstockpicks.com/