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PCS Message Board

  • dodilligence dodilligence Oct 26, 2012 4:44 PM Flag

    T Mobile - It's a Trap!

    Let's face it, we are in for a year of "price discovery" for the new PCS / TMobile. Our old PCS stock is already gone. We own 26% of a business that has an unknown value. Yes, ATT was willing to pay a lot for TMobile, but we know that deal can't happen - so it's not relevant. No price floor other than a few bucks in cash. Shrinking subscriber base at T Mobile and no iphone. I also think the shorts are going to figure out they get free 4x leverage on this when they short, since one PCS share represents 4 PCS / TMobile shares until they merge. Not what I signed up for when I went long on PCS a few years ago. Trying to think of reasons to stick it out.

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    • Are you serious? Combined company right now would produced$27 bln in rev... $3 to $6 billion in synergy cost savings (much more when bith merge to 4g lte)... ATT and VZ trade above 1x sales... lets say combined trades at.8x sales.. .8x $27 bln x .26 = $5.61 bln.... PLUS $1.5 bln cash payout

      Let's say at least $6 bln. .. what's more important is Sprint will purchase the combined by end of next year... the sprint/tmobile/pcs will have the same if not more, scale, clients, and spectrum... then we will either see ATT and VZ come down in value or combined increase in value.... also, less competition will benefit all carriers.. so valuations may increase for sector..

      • 1 Reply to mikeywalson
      • I'm pretty sure you need to net a big debt number that our new German friends are sending along from the $5.61 billion valuation. I think the combined company could be a good stock to own. My point is the valuation of PCS over the next year is no longer grounded on our (PCS only) performance and the other 74% of value has no market price. If I don't care where the price goes over the next year, at that point you are right, until then it could get ugly.