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Verizon puts IPO on hold
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October 16, 2000: 5:41 p.m. ET
No. 1 U.S. wireless carrier postpones offering, citing adverse market climate
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NEW YORK (CNNfn) - Verizon Wireless Inc., the largest U.S. wireless provider, shelved its $5 billion initial public offering plans Monday amid renewed turmoil on Wall Street.
The Bedminster, N.J.-based subsidiary of Verizon Communications Inc. (VZ: Research, Estimates) said it was postponing, not withdrawing, the planned sale because of recent market volatility. Verizon Wireless was formed through the merger of paging and PCS assets of Bell Atlantic Corp., GTE Corp., and Vodafone AirTouch wireless earlier this year.
"Verizon Communications, Vodafone and Verizon Wireless have agreed that, despite Verizon Wireless' strong third-quarter subscriber growth reported earlier this month, recent volatility of capital markets has created an environment in which it is prudent to defer the offering," the company said in a prepared statement.
Click here to find out how Nasdaq's troubles has left IPO investors queasy
Earlier this month, Verizon said it had added 806,000 new wireless customers during the third quarter ended Sept. 30, pushing its total customer base up to 26.3 million, up 14.6 percent year over year.
Verizon Communications announced plans to spin off its wireless subsidiary in August, originally targeting to price the sale during September. However, the company's underwriters, Goldman Sachs & Co. and Merrill Lynch & Co., pushed the pricing back to early November as the markets for telecom stocks weakened.
 Monday's postponement comes amid a difficult environment for U.S. wireless carriers. AT&T Wireless (AWE: Research, Estimates), the No. 2 U.S. cellular carrier, raised more than $10.6 billion last April in its initial public offering and subsequently jumped to $31.88 in its first day of trading. But the stock has fallen steadily ever since, closing Monday at $20.50, amid overall weakness in the sector.
Another rival, Sprint PCS (PCS: Research, Estimates), has seen similar results. The No. 3 U.S. wireless concern is now trading nearly 53 percent below its 52-week high.
If the company raises the $5 billion it has targeted, Verizon Wireless would rank as the ninth-largest IPO in history.
Rumors swirled around Wall Street all day Monday about the possible postponement after Credit Suisse First Boston telecom analysts published a report saying Verizon Telecom President Larry Babbio told them the IPO could be postponed due to market conditions.
That report, obtained by CNNfn, said the company would use debt to finance its planned bids during the upcoming federal auction for new wireless spectrum if the IPO was postponed.
A Verizon spokesman declined to comment beyond the company's statement. 
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