Genuity Defaults After Verizon Decision

Shares of Genuity Inc. lost nearly 89% of their value and the company was thrown into debt default as Verizon Communications Inc. ruled out a rescue of the money-losing communications services company.

Genuity shares closed at 29 cents, down $2.30, on Nasdaq. The shares of Verizon, the No. 1 U.S. local telephone company and Genuity’s former corporate parent, lost 25 cents to $27.60 on the NYSE.

“We think Verizon’s move throws Genuity into the abyss and may be a death sentence,” said Kaufman Bros. analyst Vik Grover. He downgraded Genuity shares to “sell” from “hold.”

Verizon said it had decided not to reabsorb Genuity and would not be obligated to make additional loans to the company. Verizon was forced to spin off Genuity as a condition of the merger of Bell Atlantic Corp. and GTE Corp. that created Verizon in 2000.