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T-Mobile US, Inc. Message Board

joelipper73 8 posts  |  Last Activity: Jun 22, 2014 2:13 PM Member since: Mar 30, 2014
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  • joelipper73 joelipper73 Jun 22, 2014 2:13 PM Flag

    The rumour is that Sprint is acquiring Tmobile for approximately half cash and half stock. The cash amount of the offer will be fixed, but the value of Sprint shares will be in flux after the announcement is made. If the value of Sprint stock were to go down upon the offer's announcement, then so would the actual value of the offer. Once the offer is made, the price of Tmobile stock will be directly linked to the price of Sprint stock.

    I believe that Softbank is counting on the value of Sprint stock to soar after the offer is made. That would fend off any counterbids. If that happens, then the price per share of Tmobile could go past $40, even before the deal is fully closed.

  • Reply to

    Change in Sprint Shareprice?

    by dcervan123 Jun 15, 2014 4:55 PM
    joelipper73 joelipper73 Jun 15, 2014 6:35 PM Flag

    Sprint has about 4B shares total, and Mr. Son has about 81% stake or approx. 3.24B shares of Sprint. Mr. Son doesn't need to dilute shares because he can use that extra 30% stake (1.2B shares) he has to exchange for Tmobile and still retain majority position.

    If Mr. Son exchanged 1.5 shares of Sprint + cash for the approx 800,000 shares of Tmobile, then Mr. Son would still retain majority 51% position.

    Since Deutsche Telekom controls a 67% stake in Tmobile or about 536,000 shares, then a 1.5 share exchange + cash would give them 804,000 shares in the new company. And guess what? 4B Sprint shares divided by 804,000 of Mr. Son's extra shares used in exchange is equivalent to the 20% minority position for DT that's being talked about.

    No dilution is necessary.

  • joelipper73 joelipper73 Jun 8, 2014 6:47 PM Flag

    Where did you find the story?

  • joelipper73 joelipper73 Jun 8, 2014 6:40 PM Flag

    My point is that no dilution is necessary to make this deal work....Mr. Son can get cash without dilution.

    If a merger agreement is announced, and there is no dilution of Sprint shares, then I believe the price of Sprint shares will go up. Right?

  • If Mr. Son has an 81% stake in Sprint, then he would have about 3.24B shares total. If he gives Tmobile shareholders 1.2B shares of his Sprint position (1.5 share + cash in exchange), then he would still have a majority position of the new company (about 2.04B shares or 51% stake)

  • joelipper73 joelipper73 Jun 8, 2014 6:18 PM Flag


    If Tmobile has approx 800M shares....

    then 800M shares x $32/share = $25.6B. Right?

    At Friday's closing of $8.78 share for Sprint, then a purchase of Tmobile for $32 cash + one share of Sprint would come to $32.624B.

    Anyways, my point is not the actual cash value that Sprint will offer Tmobile, but rather that I think it is unlikely that Sprint will issue more shares to make this deal work.

    Mr. Son has enough extra shares of Sprint with his 81% stake to do the deal and still retain a majority position in the new company. Also, there is reports that Deutsche Telekom will still retain about a 15% position in the new company. Ask yourself, how is Deutsche Telekom still going to retain 15%??? Well, I suppose it could be through dilution, by it wouldn't have to be. If Mr. Son offers one share of Sprint in exchange for each Tmobile share, then Deutsche Telekom would have a 13.4% stake in the new company....not quite 15% but pretty close. Even if Mr. Son offered 1.12 shares of Sprint in exchange + cash, then that would be 15%, and Mr. Son would still have a majority stake.

    It's Mr. Son's style to do a share exchange, and I believe he can raise cash easily without diluting shares.

  • Son has approx 3.2B shares of Sprint (80% of the approx 4B total shares of Sprint), and if he reduces his position by 800M shares (20%), then he would still have a majority position of 60%.

    Now it so happens that Tmobile has approx 800M shares outstanding. If Son purchases Tmobile from the shareholders for 1 of his extra shares of Sprint + maybe $32 cash, then Son would still own a majority postion of 60% of the newly merged company. Sprint shares would then be exchanged 1 for 1 of the new company.

    In that scenario, Son would then be able to purchase Tmobile for about $25.6B cash plus whatever he paid for his extra 20% stake of Sprint.

    The clincher here is that with this scenario, Deutsche Telekom who owns 67% of Tmobile or approx 536M shares, would then be given a 13.4% minority stake in the company.

  • Reply to

    How much do you estimate the sprint bid to be?

    by don_vu May 23, 2014 11:14 AM
    joelipper73 joelipper73 May 29, 2014 2:39 PM Flag

    It doesn't sound like Sprint is bidding for the T-mobile shares that we can buy on the open market...they are bidding for Deutsche Telecom's majority ownership stake. It's a different thing. This isn't like when AT&T tried to acquire Tmobile. It's very possible that the price of Tmobile shares will sharply decrease after people finally realize this.

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