Merriman Curhan Cuts Terremark Worldwide to Neutral
Terremark Worldwide (TWW) reported a fourth-quarter loss of 50 cents per share. Merriman Curhan downgraded Terremark shares to neutral from buy.
Analyst Colby Synesael tells S&P MarketScope the company reported weaker-than-expected fourth-quarter results. More importantly, the analyst says Terremark announced that it is expanding into new markets of Washington D.C. and Silicon Valley, when it had earlier stated it had no intention of expanding. Synesael thinks its Miami center is only about 12% maximized, and would feel more comfortable when the company is experiencing additional capacity there.
Synesael notes the company has only $20 million in cash, and each new center will cost approximately $55-$60 million per center and would have to be financed. The analyst would also be more comfortable with the company once it is free cash flow positive.