Straight Path Communications (STRP) stock is plunging after the announcement that AT&T (T) is pulling out of the bidding war created by Verizon (VZ). The stock was down over 20% in pre-market trading. Verizon is also trading down this morning on the news,
There is no doubt that Verizon is over paying for the company, It’s $184 per share offer is almost double what AT&T had bid for it ($95.63 per share) and represents a premium of over 400%. In addition Straight Path ( Verizon) will have to pay a substantial break up fee to pull out of the deal. Valuable 5-G spectrum has been the catalyst for the move for StraightPath.
I expect AT&T shares to bounce up this morning on the news. I own shares of AT&T and Verizon, but I have to admit I believe AT&T is the smarter company at this point.
Your Thoughts or Comments are welcome!