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Sprint Corporation Message Board

  • caixujin caixujin Nov 16, 2012 11:44 PM Flag

    Risk 1 and Risk 2 and Risk 3

    1. It's uncertain that whether the deal will be approved by regulators;

    2. it's also uncertain that whether Son and Hesse will stick to the deal or change the deal. Especially Hesse is a guy would change courses in the 11th hour.

    3. Even the deal does go through, you can only sell 55% of your shares at $7.30. You never know how much the market will value the remaining 45%. Many might think $5.25, the price of issuing shares to Softbank would be the benchmark. But this thinking is quite wrong, stock prices are often far from issuing price. For example, CLWR issued shares at $2 at the end of 2011, but it dropped to as low as $0.86 in July 2012.

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    • ......your post is innacurate regarding the 55-45%....this is a point that is continually, even to this day, either not understood...or being intentionally misstated by bashers to scare and mislead people........

      the 55-45% provision is detailed in the SB release.......it is not as cut and dry as you state.....

      for example my contention might be that there is going to be a fair number of large holders who will not want to exit their postions by taking cash....some are averaged in higher than $7.30....and some no doubt will recognize that only 1.35Billion shares will be actively trading in New Sprint (the other 70% are held by SB)......thus it could prove extremely difficult for them to re-establish a large position.....so they will keep their shares........

      Thus, depending on how many people in aggregate elect all cash.....one might be able to elect all cash and actually get it.......this is where proration come in.....this is where what the aggregate shareholders elect......matters.........

      My suspicion is that it will prove more difficult to get all shares than it will be to get all cash......though more than likely the elections will align closely to 55-45...whereby everyone will essentially get their election.....

 
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