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Sprint Corporation Message Board

  • billbrittain3 billbrittain3 Oct 28, 2012 1:12 PM Flag

    It's All About "NEW SPRINT"

    The future, for the next few months, is all about New Sprint stock. 55% of existing S stock will be bought for $7.30. That leaves 45% which will be converted (share for share) into New Sprint stock. And, 45% of S will be converted into a 30% ownership of the new company. There are only 2 variables to consider. One is, whether or not the deal with Softbank goes through. The other is, what is the value of New Sprint stock? The market has valued the deal for somewhere between $5.48 and $5.76. (These are the closing prices for S since the deal has been announced.)

    For those who have read my posts, you know that I have been a big supporter of Sprint. I have been, through some trying times, a believer in Sprint since S was trading under $2.20. For now however, I believe there is only one way for S to trade higher. That would be for the market to evaluate New Sprint stock at a higher price. I believe, based on what has happened in the last few weeks and months, the market should evaluate the stock at a higher price. The market does not agree. The good news, about the deal, is that it limits the downside for S stock. If you check the prices of S options, puts and calls, you will see that the market believes that the future of S is somewhere between $5.50 and $6.00.


    I really shouldn't be greedy. I own S at an average cost of $2.78. However, it would be nice to see it go up further....

    Sentiment: Buy

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