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PCS Message Board

  • he9412 he9412 Mar 28, 2013 12:49 PM Flag

    Proxy vote

    I find it strange that I get a couple hundred page bundle in the mail just a few days before the scheduled vote. In it, I can't (quickly) find the basic answers that most people making a decision like this would want to know.

    My read is that:
    A. I get a couple bucks a share (highlighted over and over) that I have to pay taxes on for a company that I don't want to sell.
    B. I get a 25% stake in a highly leveraged company

    My questions, if anyone knows the answer:
    1. How much cash (not counting loans) is T-mobile pumping into the joint venture?
    2. What is the anticipated value of the merged company and based on what assumptions?
    3. How/why will the merger benefit the company?

    Unless I can digest the 200+ pages and am happy with the answer, I will probably be inclined to vote no.

    I believe that the current company is undervalued, which is why I own it. They are profitable and growing with little debt, so I don't understand why they want to burden the company with a huge new debt. If they returned at least most of the current market value in cash or we retained most/all of the new company as shareholders, I could be inclined to vote in favor.

    Ironically, I wouldn't mind buying bonds for PCS at 6%, if they weren't about to overload it to the point that it could potentially go under.

    I guess for now I'll keep reading. At least the date may have been extended (I need to confirm this still).

    Sentiment: Buy

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    • Joel West wrote on October 3, 2012 in his Seeking Alpha article: "I would presume that DT hopes that it will be able to gradually unload its 74% holding in the combined company through open market sales."
      It is expected that once the transaction is completed the ticker symbol for PCS will change "since T-Mobile USA will retain its name, technology, HQ and CEO - while MetroPCS will lose all four." (West)
      So, re your Q's:
      1. As little as possible, since DT is probably going to "gradually unload its 74% ... ."
      2. This is the $64K question; the only answer right now is "Mr. Market" is valuing the deal at $10.90 for each PCS share.
      3. Linquist has sold 1M shares of PCS over the last months; he still holds about 4M shares, but if this deal is good for PCS shareholders why is he selling his shares?
      I sold my shares in my taxable account yesterday to avoid the tax consequences of the cash payment (which might be a reason Linquist is selling his shares- but then why have the dividend in the first place?).
      As for voting for my shares in my retirement account, I do not know, but I am leaning toward "No."

    • I voted "NO". I am fairly intelligent, yet I cannot figure out the value of the merger. I have sent e-mails to PCS asking them to clarify the value of each share and have not received any response. So no vote.