FBR has debased itself, without doubt helping a client close out a short position.
It's implausible that Sprint would incur a multi-million dollar build-out of an Appalachian jungle with a profitable but essentially zero-growth base station footprint when they can simply sign a contract with NTLS at a wholesale price that works for both parties. The ROI on a Sprint build-out is negative.
The stock was at $20 when this all started, and Sprint is 1/3rd of NTLS's business so at $11/share, losing all of Sprint's business is priced in. The delay is simply each party hoping the other blinks. But with only 14 months to go. Sprint has to move soon, otherwise, tens of thousands of S clients will be left without service on 8/1/15.
It does seem to fail to take into account the ongoing nature of Sprint and Ntelos and how they have always done, and probably always will, do business with each other. I see tumultuous times ahead, and that is a buying opportunity, Just dont buy more than you can afford to wait long term, 12 months or more to reclaim and 16 months to see a return. Just my opinion or in text speak: jmo.
I'm not saying the renewal is guaranteed. But it's in neither party's best interest to walk away. There has to be a wholesale price point - probably a little lower than the current contract rate - that makes sense. The current share price implies that the dividend gets cut in half anyway, so if S and NTLS strike a deal that supports cash flow for half the dividend, then the share price won't be going to $6 because it'll be safely yielding 7% right here.
Yeah, insiders should be buying and that would be comforting. Anyone know how much they already own?
I don't doubt the veracity of what you wrote concerning FBR, but I disagree with your assessment of the share price. If Sprint doesn't sign on with NTLS to renew their contractual relationship, the stock will be a $7-$8.00 stock. I don't plan to buy any shares here until I see either massive insider buying or a signed Sprint contract. Right now NTLS is nothing less than gambling, and I don't feel like gambling with my money when I can make sure returns elsewhere.