45% stake in VZ who is on pace to make $40B EBITDA using a reasonable 10X multiple places value to VOD holders of ~$37/share!! before any value in VOD's other operations... Stupid cheap here.Should be bouncing at LEAST midlle $30s ground. Buyout rumor was 40% over that current which would be near $40/share. Apparently AT&T is buying the rest of VODs assets the market is placing $3/share with that buyout offer. Fair buyout might be closer to $45/share than $40. Essentially VOD is stupid cheap at currecnt price levels.
Because the value has to be unlocked through a buyout or a complete takeover. Einhorn been sitting on this one for a couple years I believe. Looks like his pay day is about to bare fruit soon if all the apparent stories coming from the supposed ranks come true. 100B is a lowball offer based on a projected $40B EBITDA for VZ in 2013. Offer should be closer to 180B based on last VZ report and a modest 10X multiple. Keep in mind the costs VZ was eating on new smart phones is slowing down as the cycle rate of smart phones slows. Apple's big profits about to come to VZ coffers with that longer cycle.
JMO, VOD would be stupid to accept anything less than 160B for the 45% stake in VZW or tell VZ to take a hike and pay the divy due. Read one blogger post that rest of VOD operations are valued near 100B or more by Einhorn. Take a hard look at that market cap vs. current. We're talking in excess of $52/share IF IF IF full value was unlocked. Wether that happens is definitely a large debate we could go on about but talk about undervalued. Game of patience and VZ trying to bleed out VOD is over. Now it's time to pay up as all the FCF comes to roost at VZW.