This excerpt from today's Seeking Alpha piece:
"as the demand for mobile internet usage skyrockets worldwide, the demand for adding capacity to keep pace with that demand is also skyrocketing. Data traffic is doubling annually for AT&T (T) and the demand for spectrum will exceed supply some time in 2013. AT&T has been scrambling to cobble together as much spectrum as possible to alleviate the data requirements of its customers".
Each day that passes, more and more investors are coming to realize that the demand for wireless spectrum is hitting a "critical mass" this year. Each day that passes us by with articles such as this one (see articles for CLWR on yahoofinance) illustrates the intensity behind Verizon's and AT&T's drive to accumulate spectrum. It also illustrates why somebody like Dish would bid for a minority stake in a company like Clearwire... because $3.30 a share is cheap for what you're buying EVEN IF Sprint holds a cudgel over your head. It's rare that you see a company go chest-to-chest with another company like this for a minority position unless the price being bid is ridiculously cheap relative to the value, and scarcity, of the assets being bid on.
Minority shareholders have every reason to believe they're sitting on something big. Mr. Son saw it but he doesn't know how to wheel and deal before the opposition can get organized. Dish sees it, and sees enough value to deal from a position of weakness vs sprint. Minority shareholders see it and realize that a stalemate puts time on their side while the value of spectrum climbs higher almost on a daily basis.
The market is right today, and it hasn't been often with this stock. $3.30 a share will certainly be trumped because nobody outside of Sprint's surrogates (intel, comcast, brighthouse) are going to give up their shares for anything less that 30 to 50% of what the net, liquidating value of this company is... and that's more than $3.30 a share.
What price will get people to tender their shares? Who knows... but I can assure you that when Sprint raises it's bid, it will be accompanied by a truckload of propaganda and threats of walking away from something that constitutes Softbank's Mr. Son's wildest dreams...
... and that's more U.S. spectrum assets than AT&T and Verizon combined... spectrum that's exactly the frequency and exactly the transmission protocol that he uses in japan and that will be dominant for data transmission world-wide.
No matter WHAT he says, he's not walking away. Everything aside from Sprint's propaganda says otherwise.
something seems wrong with the message board. I cant see your reply on 2 of my 3 internet viewing devices...strange...
at any rate
Seminoles not gators. Haha
I have sat througha few Mreits wholesalers presentations and have always liked the story. Spent the last two years as an independent fa in south Fla before taking a job in Bothell WA and usually sold more of regular style reits like the ones from American realty capital arc2 and arc3. Arc 3 is being purchased by the reit company for 20% premium so they r making a killing on their purchases. And public companies lime agnc are on fire so maybe it is.time to go in an mMreits direction as u say.
I've been interested in them since following cse thru its change from a reit to a bank and was able to capitalize on their. 99 cent bottom in March 09 and sell in the 6's much the same success story as lvs
At the moment I have been selling of.chunks of lvs and have been in sp500 etf looking for some new opportunities. Been nibbling at clwr from the 6s on down and now own over 140k at an avg of 2.15 thanks to the drops over the spring and summer.
Thanks for the response, and cheers to salmon and dungeoness from the NW
... you're from the left side of my state or I'll be giving you a "coug sandwich" ;-) The Zags are all the rage in WA now too... easily an elite-8 team this year. I'm hoping to do the WCC tournament in Vegas in march.
I'm not positioned as big in NLY as I want to be yet so I'm hoping the fed stands firm on QE3 today so I can pick up additional traunches of it in the mid $14s. I also wouldn't be a seller of LVS as China growth recovers, Cotai Central ramps, and the re-modeled VIP suites open up. Too many "accelerators" there.
Otherwise, I'm seeing the overall US market as "fully valued" between 1500 and 1600 on the S&P and continue to prefer asian companies as all these deficits and money printing increasingly make headlines as congress and obama duke it out over spending cuts. The M-REIT story is an exception to that simply because I don't see the board of governors as patient with buying long dated stuff as Bernanke might be... and not a patient buying the long dated stuff as they are with traditional fed-funds related open-market activity. At SOME point over the next year or 2, the yield curve will steepen and the M-REITS will advance to augment their income production.
Gotta go... nice chat'n fsu.
Nice post spok, it is definitely an inevitability.
Have really enjoyed reading your posts here and of course at the LVS board starting in march 2009. Can I ask what other boards you are active on at them moment? I feel like CLWR could be bought out at any time now and would like to continue reading your posts. Are you out of the REITS yet?
... are you a Florida State Gator? I had to cancel my dec. trip to the keys this year... too busy.
I have no time for boards other than these 2. I posted on CT's board prior to the very profitable buyout of most of Capital Trust's operations by Blackrock and subsequent secondary offering at Blackrock.
I'm actually currently accumulating a mortgage REIT following the recent crash in them that pertains to the fed's flattening of the yield curve via QE3. NLY now provides a 12%-plus dividend at it's $14.80 or so PPS. The reason why I feel the timing is ripe on NLY is because I don't see the fed continuing with QE3 until unemployment drops to 6.5% or whatever because we're NOT going to get to 6.5% under Obama given the 50-year low in capital spending in the U.S... there's no engine to get the U.S. to 6.5% unemployment other than the massive fiscal (1.2 trillion deficits) and monetary stimulus that's been going on for 4 years now with zero results. The fed can't keep buying/monetizing every deficit dollar that's financed indefinately and once QE3 flags and the yield curve steepens, mortgage REITs will climb... it's inevitable.
There is already dissent at the fed over QE3 and operation twist, but I don't expect ANY dissent over keeping fed funds at zero... and that spells a potential prime environment for mortgage REITS sometime over the next year or 2. Always remember... contrarian/value investing requires patience and you should expect a 2 year time horizon for an M-REIT strategy to come to fruition.
For the record, don't confuse mortgage REITs with classic REITS which buy properties... they are completely different investments. There are numerous good pieces on them, particularly by seeking alpha contributors, under NLY's symbol since NLY is the country's largest mortgage REIT.
Hope this helps,
... 2, completely different scenarios. It's conceivable... perhaps quite likely... that he would support the board's approval of the sprint bid yet personally vote against the deal with his privately owned shares.