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T-Mobile US, Inc. Message Board

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  • So, a buyout should be = $40.


  • TMUS is moving forward and so does the US wireless prospect - mobile/wireless internet is growing and still in infancy - more users will migrate to mobile/wireless when bandwith/speed is improving and it will.


  • BittyBit, what's a "sitution"?

    Once a DumDum.........

  • Reply to

    jus t a few facts...

    by flatwood_farms Aug 3, 2014 1:20 PM
    blackcock_financial_management blackcock_financial_management Aug 4, 2014 2:29 PM Flag

    Agree. I think what they are doing is purely idiotic. They are operating at loss fishing the customers that they cannot lock to TMUS anyway. Should S, T or VZ come with a better offer TMUS customers are gone in the wind. And so is all the cash they burned to get those customers.

    So why are they doing this? They are after a greater fool which apparently came from Japan but turns out that FCC saved this guy... what a ridicule...

  • Reply to

    jus t a few facts...

    by flatwood_farms Aug 3, 2014 1:20 PM

    just a few *more* facts
    1) people who switched are one time costs, if they are able to convince people to stay (which is likely given their rates are generally more favorable compared to other major carriers) eventually, all those new subscribers will be profitable subscribers.

    2) There are many people interested in TMUS, even if no one buys them, I still believe their turnaround will pan out.

    3) synergies will reduce costs, and easily became profitable. referring to #1 is no longer valid.

    4) if variable costs goes down, slashing costs with twice as many subscribers (but not quite twice the costs) makes sense and would even attract customers from Verizon and ATT.

    5) while all 3 would be competing against each other (and obviously Verizon and ATT don't want to loose subscribers), this argument could strengthen the view of the merger. as in, it's better to have 3 competative carriers than 2 competiting with each other + 2 competing with each other.

  • Charlie will only make a bid for TMUS only it the foot work of LLIAD and S appears to fall through.

  • Other bidders may provide alternative options for T-Mobile. While Dish Chairman Charlie Ergen has said that he doesn’t want to get into a bidding war over T-Mobile, Moffett says he shouldn’t be ruled out. The same goes for Carlos Slim’s America Movil SAB, a carrier in Mexico, he said.

    “Even though Carlos Slim has suggested that he’s not interested in acquiring a U.S. operator, it’s hard to give up on the idea that he might be a potential acquirer because America Movil owns a huge customer base here in the U.S.,” Moffett said. The company owns TracFone, a U.S. prepaid business.

    Unlike Slim, Ergen has shown interest in buying U.S. wireless assets. When SoftBank was buying Sprint last year, Dish made a competing offer, then ultimately backed away.

    “Everybody’s been waiting to find out what Charlie Ergen will do,” Moffett said.

  • I find this to be a good news for providers like TMobile.
    say no more to high switching costs from Verizon and ATT

  • The only beneficiaries of a Sprint deal are Sprint investors. T-Mobile investors have to take on reg risk and the market will discount any Sprint offer sig.

    Iliad has already lined up financing with HSBC and BNP. He is also selling $2B of Iliad stock in a secondary to raise funds.

    Have not seen anything but HOT AIR from Son after 8 months. I suggest you respect this bid instead of dismissing it outright. See deal mechanics above.

    Also see the way Numericable bought SFR in france with junk bond issuance. You people are naive to nonsense media reports that do not do any deep analysis but just repeat general thinking.

  • Do not forget the tax inversion benefits of this deal. It will be instantly accretive to TMUS if they move HQ.

  • 1) T-Mobile under the current business model is not profitable. They are gaining subscribers at an operating loss.
    2) Bidders are probably raising the potential price of acquisition..........none of which looks likely.
    3) If successful, the buyer will pay a premium for a model that doesn't generate profits. See#1
    4) In light of the above, both potential suitors claim they will slash subscription costs. Some how they will find a way to service the acquisition costs( debt ) at the same time they are lowering subscription prices on a carrier that's already losing money ...T-Mobile. Forget capex for infrastructure and increasing service.
    5) One supposes that T and VZ cannot figure out how to manage this threat competently and will be damaged by this gadfly concept.

    I'm am not even going into regulatory issues.

    Given this, please tell me what am I missing. Does any of this make sense?

    These are just my humble thoughts and questions.

  • Reply to

    When will this company be profitable?

    by flatwood_farms Aug 2, 2014 12:56 PM

    Wow I almost thought you was talking about Sprint there for a minute as they are on the same track with their Vision other then Son has Much deeper Pockets to keep Sprint up and running for a much longer time then what TMUS has.
    Not to mention the partnership with Dish and now the renewed partnership with Google along with Spectrum sharing agreements they have just signed with all the smaller wireless carries.
    the only thing Son is not done yet but their are talks about lowering prices for this Holiday Season is use his 2nd option
    and that is lowering all his prices below TMUS take customers from all three carriers as TMUS is trying to do and pick up whats left of TMUS in a Fire Sale.

    Remember as i posted before it is DT that will make the call on this and at what price and how many of their shares they can sell as they control the voten power with the 68% majority ownership they own and come Nov. when their shares become UNLOCKED they will do what is best for them should they still have to hold interest in TMUS and not exit the U.S. like they want.

  • Hey Rock Head what is it that you do not understand about a TMUS merger.

    IT is DT that is in the driver seat with their 68% ownership not TMUS and come Nov. when they all become unlocked DT can do what ever they want with them and that means keep them or sell then at what ever price they want and as many as they want.

    DT knows as well as the rest of the world that Sprint is the Better choice of any suitor even if it is only for 49.9% of their shares as it brings another stronger wireless company together and if DT is stuck holding shares and interest in TMUS and can not depart the U.S. right away what do you think they will feel is best for them that will not make them have to invest billions more into TMUS to keep them running.

    TMUS is trying to play both ends by lowering their cost to buy customers and not having the cash or the Spectrum it will take to carry this over night program on and still stay in the market without cash injections and what they have done was gifted money from a failed merger and Son is not about to Gift them money that way and he can very will take them billions of dollar he was willing to spend and complete his build out as he is doing lower his prices more then TMUS can and get TMUS in a Fire Sale

  • There are two big problems with Iliad's offer:

    They can't actually afford it
    They have nothing to offer TMUS

    Iliad is struggling to find lenders to finance the purchase. If they have to borrow money to buy TMUS, where's the upside? It's not like they have a retail or infrastructure or spectrum holding presence in the US. Yeah, it'd be a one-time influx of cash, but it'd come with a load of debt attached. It would be difficult for anyone in DT or TMUS to convince the other shareholders that the sale to Iliad is in the best interest of the company. And although the majority of shareholders have a minority stake in the company, they could and likely would take legal action to prevent this particular deal.

    That's not to say that a merger with Sprint would be easy to accomplish either, but it would be far more beneficial from a business perspective.

  • Reply to

    When will this company be profitable?

    by flatwood_farms Aug 2, 2014 12:56 PM

    I do, and now we've discussed this in two different threads. But just to reiterate:

    The only reason they are NOT profitable is because they are taking all of their profits and reinvesting it into infrastructure and resources. Put more simply, they are acquiring spectrum whenever possible and building more towers. Their goal is to offer a highly competitive PRODUCT, because you're right, simply undercutting the competition won't work forever. In order to improve the quality of the products and services they offer, they cannot take profits at the moment. You'd know that if you read their financial reports; the cost of customer acquisition is a minor expenditure as compared to what they're investing in the company itself. And acquiring customers will increase their revenue, which means they can either improve their network faster, or take a profit when revenue exceeds expenditures.

    Now, if there's a merger or buyout that results in a capital infusion, they can take profits sooner, because they won't need to re-invest their revenue. If there's no merger, they can continue to take all of Sprint's customers and AT&T's (fun fact: the largest customer migration from any carrier to another during Q2 was from AT&T to TMUS).

    Remember that they won't always need to expand at the rate they are now. There have been 30 new MetroPCS markets since the merger last May, and dozens of new TMUS corporate locations. They've built out 4G and VoLTE. They've added more spectrum for better building penetration. All it would take is a single quarter of scaling back their expansion and buildout efforts to be profitable, but that's not happening NOW because they're investing in the long term, not providing instant gratification payouts at the expense of the future of the company.

    [character limit reached, see next post]

  • Betting that Ergen/DISH will soon enter fray and make an offer for T-Mo. It is very clear that the Sprint-DT deal has stalled. All this nonsense about them preparing for regulatory hurdles is nonsense. T-Mo does not want the deal that Sprint is offering them.

  • The stock is trading down in a risk arbitrage scenario which is very normal. They are paying cash for the deal not stock. So the stock price is reflecting their debt load. Its normal. Adding another $3B to the $15B debt is not going to change anything either...see deal analysis above.

  • buying someone bigger than you is hard.
    .especially with their stocks trading downward, they are facing pressures from their own stockholders.

  • The fact that Iliad can potentially buy T-Mobile has made many worldwide telecoms sit up and wonder if they could win T-Mobile. If Iliad gets T-Mobile, Sprint's business model is going to be under additional pressure. Not just Sprint but Verizon and T's as well.

    Here is Iliad's play:
    56% of TMUS for $15B $33....current offer.
    Probably will end up with
    51% of TMUS for $15B suggests $36.43 per share
    At $17B for 51% = $41.29 and at
    $18B for 51% = $43.72 a share.

    These estimates are just collaring the current bid and could easily be done by Ilead. So, Ilead has to be now considered a very serious bidder although media reports are discounting them signficantly.

    Now going from $15B to $18B is not going to be hard for Ilead. They have probably already baked an additional $3B into their bid price.

    For Sprint, the acquisition of T-Mobile would have accomplished two things. Stop the bleeding of Sprint stock during the FCC/DOJ review period and the ability to catch up with T-Mobile if the deal is not approved. But recent reports by T-Mobile suggests that DT is not going for the business/capex plan proposed by Sprint during the review period.

    It is very clear that if Ilead gets T-Mobile, the bleeding for the entire US telecom industry is only just starting. With an Ilead like business cost model, T-Mo could seriously wreck the cash flows in the space. It is extremely important therefore that Ilead not get T-Mo. Most so, for Sprint but also for At&t and Verizon.

    Sprint will have to bid in the high-40s now (given the analysis above) to ensure that it gets T-Mobile and makes a case for the merger. It is also possible that DT just takes a $43 or so bid from Ilead and does not entertain Sprint's higher price at all.

    Net, net...Sprint can either make a knockout bid ($50s) and make it impossible for Ilead to get T-Mo. Or it will lose the option (which has its own regulatory risks) to get T-Mo.

    Not looking good for Sprint whichever way you cut it. Sub-$5 is

  • Reply to

    When will this company be profitable?

    by flatwood_farms Aug 2, 2014 12:56 PM

    Let me be honest. I do not believe T-Mobile can be profitable. Not now , not ever. Aside from all the hyperbole generated by senior management , they rarely discuss profitability. Why? Because they know they cannot place the company in the black on operations. Do you believe the company will ever make money? When?

    Just my humble opinion. Do your own due diligence.

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