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United States Cellular Corporation Message Board

  • ironmouse2399 ironmouse2399 Nov 5, 2013 11:50 AM Flag

    Zacks Nonsense "Strong Sell"

    Zacks analysts play the game of ignoring industry consolidation. If USM were not going to be consolidated, it might actually be a sell, but even there probably not. They can still sell $1 billion in tower assets and get through their ridiculous overspending on a billing system and the financials will get better with the divestiture of St. Louis and Chicago - severance losses today for 1000 employees, but better results tomorrow.

    Either way the sale, or at least a joint deal of some sort, of USM is a matter of when, not if. Soon they will have 90% of the network upgraded to LTE making the whole thing attractive to a buyer. And even if they don't sell (which I think is highly unlikely due to the competitive realities) as you migrate customers over to LTE at some point you get rid of the costs of running multiple technologies at the cell site.

    USM is worth around $7.5 billion to a buyer, but I could also see them monetizing towers, selling the interest in the NY partnership, etc., keeping the cash and selling the rest for 6.5 billion or so. Not sure of all of the accounting issues which argue one way or the other, but there is clearly a lot of activity going on here.

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