Dude - don't fall in love with a stock based on headline news - you'll get your backside handed to you. I know because it's happened to me more than once.
The market has reacted to realty - no matter what happens with SON's speech next week to the chamber of commerce.
Whig - everyone is coming to the understanding that a merger with TMO is a longshot right now - not saying it won't happen in a year or two, but it's essentially off the table for the near to intermediate term.
You're wrong, SB is not going to pay 46B (as DT wants) - it would be suicide and Sprint pps would get clobbered (for heaven's sake, they already have 20B+ in debt). SON, if he's as smart as I think he is will step back - he and Hesse will still talk the consolidation talk, but they won't walk the walk - a deal just doesn't make sense at this point - especially with a 46B price tag.
Anyone invested here hoping for 10, 12 or even 15 within the next 2-3 months is dreaming a bad dream - Sprint needs to show they are executing on strategic initiatives with commensurate financials - they do that and we'll see those numbers later this year, just not overnight like many here hope
From recent high - and that was during a fairly good market week. Merger is off the table for at least a year and if fails to hold here another 10% down is not out of the question.
When all is said and done, Sprint needs to show they can compete on their own - only then will we see sustainable pps increases.
I think it has more to do with short sightedness on the part of the DOJ/FCC, and who knows, maybe intense lobbying by AT&T and VZ. Right now they (DOJ/FCC) see competition among all 4 players - question is how long the smaller two will be able to maintain a competitive position as neither have the resources to fight a prolonged price war.
A merger is certainly possible - just not this year. As I said before, either S or TMO will have to considerably weaken vis a vie their competitive position. At that point the DOJ would be looking at 2 strong players, one also ran, and one that's toast.
Think that would make a merger argument much more tenable to the FED's
German culture vs Korean culture vs the DOJ/FCC....The DOJ/FCC are both on record as saying they like the current competitive environment and are not inclined to favor a merger.
At the end of the day, anyone invested here solely on "merger potential" will be disappointed.
Investors here who believe the longer term potential of S will be rewarded - just not overnight like many here hope.
There will be consolidation, but it won't happen this year and only if either Sprint or TMO become considerably weaker - I'm betting that Sprint will be the survivor when all this plays out.
Problem is DT's CEO is going back and forth and now talking about a 46B price tag - way to high.
If SON and Hesse are smart, they'll let dust settle around merger scenarios and concentrate their energies on making Sprint the solid #3 player (at the expense of TMO). Why pay a premium for TMO when there is a good chance their aggressive pricing programs may backfire and could result in a much cheaper buyout early next year.
I agree, and SON is well known for using other peoples money in acquisition scenarios - perhaps I should have said that the 30 billion could go a long way towards ensuring a smooth integration and continued build out of a combined company
If you do know it is in fact happening that's called "insider information" and the last thing you want to do with that is post it on a message board !!
I believe the Alibaba ipo was originally expected in January 2014 or sometime in the first quarter – wonder if this original assumption contributed to SON starting chatter about a TMO acquisition as he stands to pocket 30 billion when it does occur. With that kind of money, a TMO deal would be relatively easy to consummate (save the DOJ / FCC).
Now that the ipo has been pushed into the 2nd or even 3rd quarter, it may have contributed to SON stepping back just a bit – he still wants TMO, but perhaps he is also waiting to see how the Alibaba ipo plays out and in the meantime working with the FED’s to craft a deal that would be amenable to them.
While 200 million pops is nothing to sneeze at, it's still only 2/3rd's of the population - they get to 300 million with Spark things will get very interesting around here.
Whig - the deal is dead for practical intents and purposes until at least the end of this year - those that made money on the spec cashed out in December / January.
At this point the question becomes how well will Sprint be able to execute on their core strategy. They're on record as saying the first 6 months of this year will be challenging at best - if they are able to show substantive progress in the last half of the year we'll be higher. How high is anyone's guess but I keep coming back to TMO's 120+ p/e @ .28 eps.
TR - agree with virtually all of what you say, however have to respectfully disagree that TMO's current strategy is sustainable longer term as DT has even come out and said that they see limited long term profit prospects being the # 4 carrier - especially if S successfully continues on its current path which finally seems to be gaining measurable improvements.
It appears that TMO may be slowly heading between a rock and a hard place and perhaps that will lead them [at some point in the future] to aggressively pursuing a deal with S and the FED's
Whig - merger is essentially on the back burner for now which is a good thing in my opinion - There is no need for SON to aggressively pursue DT, especially since DT has indicated time and again they want out of the U.S. market and we all know the FED's have repeatedly come out against the deal. Let the chips fall - TMO's aggressive pricing is not sustainable which should ultimately translate into a much better bargain for SON / SB and if TMO weakens, perhaps a more conciliatory FCC and DOJ.
I'll go on record as saying I think merger talk will heat up again later this year.
EM – hope is not a good strategy. As I and others have indicated, a merger is not necessarily in the best interests of Sprint at this time, especially if there is a breakup fee involved – that could just serve to enrich DT and by extension TMO.
There is a very good article from Forbes currently available on yahoo finance which outlines Sprint’s current position and potential future.
At the end of the day, Sprint needs to concentrate on their own execution and pps will follow. It’s not going to 15 or 20 overnight as some hope, but if they execute as I am betting we will see gains and ultimately a merger will become more realistic
Agree - SON should just let DT stew and certainly not agree to any break up fee, especially since DT has wanted out of the U.S. market for years and would only use a break up fee to bolster their own balance sheet or potentially make TMO a stronger #4 competitor.