“There is no doubt that Verizon is over paying for the company”
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!
“What is the truth and what is rumor ?”
Almost everyone, except possibly the Verizon (VZ) CEO and its Board of Directors, can see that Verizon has been pinned into a corner by the recent moves of T-Mobile (TMUS) and the brilliant acquisitions of AT&T (T). T-Mobile’s move to merge with Sprint ( S) and its aggressive campaign for wireless customers have taken a toll on Verizon. Add to the mix recent moves by AT&T to acquire Direct TV, Time Warner and Straight Path Communications and Verizon seems to be having a melt down.
At least this seems to be the case if you believe half the rumors that are surfacing on Wall Street. Most investors, including myself, have been confused about Verizon’s announced acquisitions of AOL and Yahoo. Neither of which added a lot of value for Verizon in comparison with the cost (this investors opinion)
Now the latest rumors making their way around Wall Street are that Verizon will attempt to outbid AT&T for Straight path Communications for its prized spectrum. This was later denied by Verizon’s CEO as he stated that Verizon had all the spectrum they needed for its 5-G roll out. Then the CEO announced that Verizon would be open to being acquired by a major entertainment entity like Disney (DIS) or Comcast (CMCSA). There has been no response, at least to my knowledge, from either Disney or Comcast but I have no doubt both are looking into the possibilities. Now it seems Verizon’s latest target has become Time Inc. (Time) ! This latest one makes no sense at all to me – what would Verizon want with a defunct magazine publishing dinosaur?
What is the truth and what is rumor ? I have no idea at this point but it seems Wall Street has a lot of time these days to spread rumors and gossip or perhaps it is well planned misdirection. If you believe the Wall Street rumor mill you would certainly come to the conclusion Verizon is looking to buy out the whole S&P 500 but of course that is just sarcasm. There is no doubt though , using a chess term the Verizon CEO has been checked, but he is not checkmated yet. He will have to make some serious moves to move his company into a position in which it can win the game again. Whatever the truth is I will continue to hold my position in Verizon for the time being, but you can bet I will be keeping a close eye on it!
Your thoughts or comments are welcome!
“I believe Verizon has been blinded by the light of AT&T”
Verizon to Merge with Disney or Comcast ?
Maybe in the future !
Verizon’s (VZ) CEO Lowell McAdam has stated publically he is open to a Merger with any large Media or Telecom Players including Disney (DIS) or Comcast (CMCSA). he wants to “reset” the company’s course.
I believe Verizon has been blinded by the light of AT&T (T) lately as it has made some very important strategic acquisitions moves including moving into Mexico, purchasing Direct TV , Time Warner and most recently its deal to acquire Straight Path Communications for its valuable bandwidth. Verizon seems to be a little lost in the wilderness with puzzling acquisitions like AOL and Yahoo, while AT&T seems to be directly focused on a clear path to the future.
There is certainly exciting changes coming to the World of Telecoms as Communications and entertainment merge into a single entity.
I own both AT&T and Verizon but I am a clear believer in AT&T as of now. While Verizon, Disney and Comcast have all spiked on the news today , I would caution that Verizon has not even had talks with any potential suitors as of yet and appears to be more of an act of desperation on the part of Verizon.
Thoughts or Comments are Welcome !
At stake is the valuable spectrum that Straight Path Communications owns.
Verizon(VZ) is possibly firing a shot across the bow of AT&T (T). As reported a couple of days ago AT&T had made a bid to acquire Straight Path Communications for about 1.6 Billion. It now is being rumored that Verizon also intends to make a bid for Straight Path.
At stake is the valuable spectrum that Straight Path Communications (STRP) owns. Straight Path holds a large amount of Millimeter Wave Spectrum that At&T and Verizon will need to build out their new 5 G networks. 5G promises to carry vastly larger amounts of data at up to 100 times the speed of current 4G networks. This will be a game changer for the carriers as they will them be able to deliver very high speed internet and related services in competition to local internet providers. It will also have huge implications for things such as driver-less (autonomous) vehicles and the coming IoT ( Internet of Things) revolution. Both AT&T and Verizon are engaged in 5G trials and in a heated race to be the first to deliver 5G.
Verizon has declined to comment on the matter.
It is my opinion that AT&T has been the clear winner in the acquisitions race lately and seems to have a more disciplined approach on where it is headed. While I hold both stocks I am of the opinion AT&T will be the long term winner.
Thoughts or Opinions ? We would love to hear from you !