General Motors Company Message Board

I have to believe that Mr. Son is starting to see that if HE buys clearwire, it gives him more bargaining power for sprint than if sprint buys clearwire, because it gives him something to contribute to sprint if they go for his bid.

Remember that in his latest bid for sprint, Son removed $3 billion of the cash infusion he had offered sprint as part of the original deal. He ALSO floated another debt offering to give HIMSELF more cash to work with.

He's effectively preparing himself for exactly what I'm suggesting. I could be wrong, but he's moving his chess pieces around as though I'm right. I think he learned something from the leverage Ergen just gained by securing the support of Clearwire's board... that it's weakening his bid for sprint.

Spok

Actually, blitz... techno-babble is the best thing that teamrep contributes to this board. Many posters seem to think it's the only thing he contributes and sometimes, he says things that make it hard to argue with them.

But you're right... I would have rather seen it in a different post altogether rather than here mucking up the simple, and good, point of your post.

S

The analogy of the relative tax rates on gaming revenues in Macau vs those in Las Vegas was very good!... very REVEALING.

It is absolutely correct that if a guy is betting enough money, it pays to fly them to Vegas and fly them back.

The lesson here is that tax rates have that effect in EVERY form of business. The fact that Obama hasn't lifted a finger to do anything about the 35%, highest-in-the-world corporate tax rate in the U.S. has damaged our country tremendously and cost us millions of jobs that are going to overseas companys or subsidiaries of U.S. companies that won't re-patriate foreign earnings and pay Obama his punative U.S. tax rates.

Apple computer's testimony about hoarding cash, and the business/jobs it produces, overseas was simply an expose' of how high corporate income taxes are hurting us relative to lower-tax overseas locales...

... just like your piece above shows how high Macau taxes on gaming revenues helps Vegas draw business (and jobs) to Vegas that would otherwise stay in Macau.

Harry Reid need to read your piece....... naawww, he'll never change... he's a dyed in the wool socialist from day 1 to 6 feet under.

Spok

The Cotai Central site was originally designed for 4, separate towers. The company began construction over 6 years ago but was over-extended going into the crash of "08 and had to suspend construction on the site. The 4th tower had not yet been capped on the pilings at that time since the first 3 towers were the priority due to their designation for badly needed hotel capacity per the site plan.

Once construction resumed, not only had Sand's changed the construction timeline to a "phased" opening, but it also left the 4th tower out of the plans for the time being. The "phased" approach had more to do with the dearth of construction labor than anything else, and Sand's need to get hotel capacity on-line as soon as it could to support Venetian's massive, underutilized ancillary attractions across the street.

Fast forwarding to today, Sands is now in much better financial shape and cash-rich. With prospects like Spain in the negotiating stage and Japan & Taiwan still on hold, Parisian is Sand's only major construction project. It was for a time like this that the company kept Tower #4 in it's "back pocket", so to speak, to expand with and keep growing in a slam-dunk geography like Cotai, until other projects in other countries could get started. Besides C.C. tower #4, Sands is also working on a mall that is targeted toward less-afluent, mass market patrons on the site.

Hope this helps,

Spok

Nice piece, dab. Thx. S.

As my friend, Don Hays always says... "nothing cures price, like price"...

... and in this case, it's cheap enough for a serious Dish bid even though Sprint enjoys both ownership AND operational control over clearwire.

Whigglee, I'm crushed that you didn't include the "commentary" portion of the Dealpolitik piece ;-)

S.

I hear you re: the tendency for a lot of crackpots to inhabit boards like this one. I make good use of the "ignore" function to keep the topics page nice and clean, but I don't think many people do that.

I like the board because it contains dozens of pairs of eyes who are scouring the internet for news. If I don't see a recent piece on a company like clwr, but I suspect that something's up, then board might well have somebody referencing some obscure news item somewhere that could offer insight.

As for posters with legit dialogue who otherwise seem to be born yesterday, I would suggest patience with them. The value of this board for them is to talk to those of us who know what's going on, and get up to speed themselves. We all pass thru that "nascent" stage of learning about an unfamiliar company, industry or technology, and having been an educator back in the 80s, I, for one, try to be patient and helpful to them...

... as long as they aren't out here playing games and quickly finding their way to my iggy button.

GLTY with CLWR, pdb.

S

In order for Softbank to satisfy his creditors demands, Sprint had to raise it's ownership of clearwire from ~48% to ~51%. Sprint did that by buying out McCaw's stake for $2.97 a share.

McCaw would only do that if he receive a "make whole" arrangement as well, which would entitle him to any additional monies as a result of Sprint's final buyout price of clearwire exceeding the $2.97 price he got. For example, if Sprint's $3.40 bid had consummated, McCaw would have received an extra 43 cents for the shares he sold sprint.

The problem is, McCaw has no such agreement with Dish, and Dish's higher bid. The million dollar question is, how does McCaw's make-whole agreement address a minority buyout of clearwire by someone other than sprint? Does he have a contingency built in that requires sprint to pay him a stipend in such a situation, or doesn't he?

We don't know... but I'm sure that he comes out best if Sprint is the buyer rather than dish... thus my joke in the nearby thread.

Spok

Yes, and I considered Dish's vendor-related influence, but then there is also the magnitude of Intel sales in the far-east to consider, and they are huge. Thus, my opin that Intel is beholden to Sprint... especially now that Softbank's hold on sprint looks very firm.

Yes, a premium over $4.40, as we currently have, would slow any early tendering... especially given that one can change their election prior to the deadline. Both Mr. Market and I expect a competing bid from sprint's "next steps", as Hesse preferred to call them.

There is real acrimony now between sprint and dish. The due diligence talks went poorly, especially when dish did the over-bid on clearwire right in the middle of them with no advance notice to sprint that it was going to do so...

... the whole cooperative agreement argument coming from teamrep is contrary to the emotions being hurled around with this thing. I still remember Ergen and Murdock so long ago... and this is like a deja-vu look at THAT brawl.

Spok

The gang of 4 "might" tender, but I doubt that Crest would.

Part of the joke... but I can say with a straight face that McCaw is now front and center in the debate over clearwire at sprint. Prior to dish's sizable over-bid, McCaw was only a sideline observer.

Given that McCaw's capitulation gave Sprint a 51%, controlling stake, I wouldn't be surprised if they aren't ALL surprised at the size of Ergen's bid. As I've said, I would be surprised if McCaw's lawyers were remiss in anticipating it, but even if McCaw DOES have a contingency clause in his make-whole agreement, it could be a weak one that doesn't fully compensate him.

It's also possible that it contains something that puts Sprint on the hook to pay McCaw something if they indeed give Ergen a pass at $4.40... in which case, that payment would have to factor into the feasibility of Sprint or Softbank making a higher bid... since McCaw's portion is effectively a higher bid anyway under such a scenario.

Of course, this is all rational speculation on my part, but I think the probability that dish's bid makes McCaw into SOME kind of an activist in all of this highly probable.

Spok

I'll post on the LVS board if I'm down that way. It's been awhile, though... I'm a lot busier than a guy approaching 60 ought to be.

Good points. The Dish bid does reduce Crest's influence. The "tender" aspect of it was an excellent stroke by Ergen that greatly helped in that regard.

An over-bid by Sprint that isn't a tender offer would likely increase Crest's influence, but surely not to the magnitude that it had weeks ago.

S

It was one of a multitude of "fine points", schmope. You should know that about me... my work on contrarian, value-encrusted, turn-around plays tends to be very granular, and that can be nauseating to some people.

Yes, Masayoshi Son doesn't hinge his decisions on Crest's positions on this matter, but they do play into his decisions right along with numerous other factors.

Hope that helps,

Spok

Intel and Comcast don't "have" to sell at $3.40, but as long as Sprint remains clearwire's majority shareholder, and they will, then Intel and Comcast wouldn't jeopardize their vendor relationships just to get an extra buck a share out of Charlie.

Look for that to dry up if CLWR keeps trading north of $4.40 in anticipation of Hesse's "next steps". S