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Verizon Communications Inc. Message Board

  • mulat6821 mulat6821 Aug 29, 2013 9:02 AM Flag

    Massive Diliution

    If Vz pops to over $50 today I am a huge buyer of puts for Dec and January. I understand why Verizon needs to do the deal but the massive dilution of existing shareholders and the massive addition of debt make this a great medium term short.

    Long term is full of bumps. With the saturation of the smartphone market and increased competition from Sprint and T-Mobile, margins will be under significant pressure.

    Think about this. Verizon is pressuring me to "upgrade" my service. They want me to give up my unlimited data plans for 2Gig at the same price and charge me a $30 upgrade fee. I have had 5 calls and emails from Verizon over the last 3 months disguising this offer as a benefit to me. They dont offer unlimited data plans anymore and the existing ones are a pretty big threat even on the upgraded 4G network. I know my data usage has tripled in 2 years to over 15 Gig per month and I don't expect that it will go down at any point in the future. Also with 5 smart phones and 2 tablets on my Verizon account my bills are very expensive. Seriously looking at T-Mobile and Sprint. My only concern at this point is coverage which in a year or two which may be as ubiquitous as Vz or ATT for where I primary use service. Then churn rates will increase dramatically and put even more pressure on Vz.

    One last point. If this deals does move forward it will value the wireless assets at ~90-95% of the companies total assets. FIOS and the landline will be less then 10%. I see Verizon keeping FIOS but will they keep the land line piece which is highly unionized and while provides for cash flow but operates at a loss.

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    • merlinwireless@gmail.com merlinwireless Aug 29, 2013 4:23 PM Flag

      Why would Vodafone or anyone sell a cash cow? Vodafone knows the party is over for Vz in the near future and are contemplating unloading this future Turd! Do as the billionaires at Vodafone are doing and Sell!

      Sentiment: Sell

      • 3 Replies to merlinwireless
      • some folks up AWFUL EARLY THIS MORNING.. wont matter. though..lol

      • All these ceo's want to hit their strike prices on their options this year... They can't do it if/when interest rates go up. Vz can't get into canada- too much political heat and competition.. Vodaphone people know us dollar will be less going forward and interest rates will be going up.
        only 1 problem left.. Will ftc allow this reduced competition to continue.
        customer bills will only go 1 way.. Up to pay for this deal.. To pay for softbank/sprint merger and up to compete with cable.. The vz common shareholder going to get killed in this deal... But the street and the bankers love 60 billion more shares that have to be placed and with commission...

    • Deserves a response I guess. You say "I see Verizon keeping FIOS but will they keep the land line piece which is highly unionized and while provides for cash flow but operates at a loss.

      A: True statement.

      You say "Think about this. Verizon is pressuring me to "upgrade" my service."

      A: Pressuring? I guess you never deal with call center people. Do you know the word NO and don't bother me again?

      You say " I know my data usage has tripled in 2 years to over 15 Gig per month and I don't expect that it will go down at any point in the future"

      A: Quit downloading all those pron videos?

      Seriously, do you know how crazy you sound? I had to tell someone the other day, please stop being a prude. Either you like the service or you don't. Yes please go back to Sprint if that's your thing. In the twenty years I have had Verizon service, I have called them once. It was to upgrade my plan. You sir, sound like a problem customer. Just saying and I am not being rude, but please read your own statements.

    • mulat you make more sense than any of the hyped up longs here overdosed on vz koolaid. vz "drink the koolaid *uck tomorrow" vz is also trying to buy spectrum to enter canada. sounds like wcom all over again.

    • Think about this. Verizon is pressuring me to "upgrade" my service. this has nothing to do about anything
      concerning the VOD deal or anything else .... VZ is in a position to keep increasing costs of it's services ...
      as for the "dilution " or addition of uber debt , check out VZ FCF ... they can certainly afford it ,
      that being said , it's reasonable to assume that the backroom boys and girls at VZ have done their
      homework and have a handle on what it will mean to own the whole ball of wax a few years down the
      road ... the entire globe is living more and more on some sort of communication devices and that factor
      is only going to grow geometricallly over the next decade .... add to the mix , the war chest of spectrum that
      VZ has and you have a pretty damned good bet going forward ...
      Keep in mind , that VZ still has plenty of assets that can be sold off to help pay the eventual debt incurred
      from such a deal ...
      THE VOD DEAL IS NOT LIKE TWC BUYING THE AOL CORPSE !!!! they will be buying a vibrant, growing
      business that is one that VZ is more than familiar with ... g

      • 1 Reply to iamgarce
      • Its about shrinking margins and increased competition from Tmobile and Sprint. That affects revenue, profit and market value going forward. While Verizon has significant pricing power today, based on my comments I see the advantages slowly eroding away.

        Verizon already controls the company. Why pay $130B for an increase in ~$5B year in dividend payments. That's a 26 year payoff. Even if it grows to $10B its a 13 year payoff and no knows where any of this business will be in 5 years or 13 years. Increased competition will surely come and cause margin compression.

        One last note. Verizon backed away from acquiring Canadian spectrum when the VOD purchase started heating up again. Which tells me that this purchase will severely restrict Verizons ability to other acquisitions in the market place for years to come.

    • A secondary stock offering almost seems a definite in order to raise $$ for a VOD buyout. Not to mention, IF VZ truly wants a deal done, the clock is ticking on interest rates going higher. Every s$mall % rise in rates, means a huge chunk of interest $ when you start throwing $100 billion around. I am long, in under $47, but I am a seller at $50. I would re-buy on a stock offering though.

    • anothernewmultialias_forwedcman anothernewmultialias_forwedcman Aug 29, 2013 9:07 AM Flag

      watch yourself. internet fraud is punishable by law.

 
VZ
50.98+0.28(+0.55%)Jul 22 4:00 PMEDT

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