Hedge Funds, smelling a quick kill are moving into MCI, and buying up stock, hoping that Qwest will prevail and offer some premium for the limping long distance giant. The Wall Street Journal reports that hedge fund types are betting that at worst, Verizon will have to up its offer to meet Qwest bid. Some estimate that Q could offer as much as $35 a share, and has retained six banks to finance the bid. I think this whole deal – Q+MCI – is a way for Q to clean up its balance sheet and eventually sell the whole package to anyone who is interested. [ Hat tip to the fearless trio at Wall Street Journal for following the merger madness so closely.] Meanwhile, from this report in the Journal, a nugget about lies being spread by MCI executives.

The General Services Administration ruled that the company won’t be barred from signing contracts with the government. People close to MCI had suggested that in any Qwest-MCI tie-up, a possible ban on Qwest’s business with the government could hurt MCI’s government business.