Recent articles are surfacing that Ron Sommers only has a slight margin of support on the Board. Not a big surprise (except that anybody on the board actually supports him). If you're Sommers and you have a shotgun aimed at your head, with angry shareholders holding the trigger, why are you waiting to list T-Mobile? The common answer is that he wants to wait to market conditions improve. And why should we believe that market conditions will improve? Are we to assume that Sommers is a genius, that through his master plan, he can tell us for sure that next year will somehow be better than this year? If Sommers listed T-Mobile in the first quarter of this year wouldn't we have fetched a better price? I'm not here to tout BT, but why are they listing in November of this year, while we wait? I guess they�re stupid and Sommers is brilliant. They have this year reduced their debt from GBP 27 Billion to 17 GBP Billion, while we have increased our debt to $63 Billion. Their stock price is flat in the last 3 months amid another Telecom meltdown, while we�re down about 35%. I have to hand it to Sommers, not listing T-Mobile, with the kind of pressure he�s under. This maniac has balls. I�ll give him that.
You are recommending BUY....I guess that means don't SELL, yet you're suggesting that Sommer lists T-mobile regardless of the current market conditions. Isn't there a contradiction here? Why should DT sell T-mobile when you don't want to sell DT....all because the market is in dreadful shape. It is the same market after all.
I have a buy rating on DT because I can easily see $18 a share when it is currently (after yesterday) trading below $15 a share. The below $15 a share that DT is trading at largely ignores the value of T-Mobile. This is very similar to ATT Wireless. When ATT spun-off ATT Wireless, if you owned ATT prior to the spin-off, you were left with shares of ATT (at about the same value as before the spin-off) and shares of ATT Wireless (which had value). It�s one of those strange situations where, the sum of the parts are greater than the whole. The money from the spin-off could be used to pay down DT debt. And some of the debt would be assumed by T-Mobile, further reducing the DT debt load. I'm not suggesting that T-Mobile list their stock regardless of the current market conditions. I'm suggesting that we can't assume that T-Mobile would be worth more next year than this year. I'm not sure if I have the facts straight, but BT must believe that November would be better than next year, otherwise they wouldn't spin-off their wireless division this year. I don�t know all of the details of the �listing� of T-Mobile. I think they may start off by issuing a tracking stock, with the intention of spinning off some day. I believe that�s how ATT did it.
If I understand this whole situation correctly, T-Mobile won't be sold. DT will simply float a stock issue and make T-Mobile a subsidiary of DT. That can have its advantages and disadvantages. From my standpoint, I'm not sure that I want T-Mobile associated with DT considering its poor track record. JMHO today.
This guy Sommer sounds like he's hanging on by a very slim margin. If you can believe the press articles, Sommer only has a one person majority before he's kicked out of the company. While I don't wish the guy any ill-will, if he's in over his head and just can't cut it, maybe he should step down and let someone in who can rebuild the publics confidence and get the company back on track. This deal about floating a separate stock issue for the T-Mobil just sounds typical of Sommer. If it doesn't have to be done today, put it off until tomorrow. The only thing that would have motivated DT to float T-Mobil is the bond rating issue, and it looks like he weaseled his way out of that situation. I just get the feeling this guy doesn't do much unless there's a crisis and his head's on the chopping block.