Sprint + T-Mobile (Hookup Alert)

Right now, my stock portfolio has more hook ups going on than the teenagers in HBO's new hit series Euphoria!  Well, you can see why I am a investor and not a comedian.  But back to the lecture at hand...a few months ago, I alerted you that things may be bubbling with Sprint and that a takeover could be in its future.  👰

How might an investor come to this conclusion? Just listen to Sprint executives themselves.  Sprint for awhile now has been publicly telling the investment community that its business pretty much sucks.  From what I can understand, the money-maker is its pre-paid wireless customers...then the HUSTLE is to convert those customers into post-paying customers like me where they can be up-charged and over-charged for services like unlimited talk, text, and data (post-paying customers). Interestingly, Sprint has publicly acknowledged they are giving out so many incentives that the business model is a money looser.

Now here comes the million dollar question, why do I care about Sprint AND why would I invest in a poor performer.  Well, I often take a contrarian view to life and believe that most things are...well "complicated".  Most people want to call Sprint a dog with fleas and they would just rather stay away.  But most things in life have layers and it's in your best interest to peel back those layers. Like in relationships, you just don't look at what's on the surface you have to look at the whole package.  Sprint's whole package is that it is one of the four leading wireless carriers in the US. I learned in elementary or middle school (can't remember) that this is essentially a cartel (monopoly, duopoly, triopoly...cartel??) haha  I prefer oligarchy but let's not get technical. The point is there is still tremendous value here. As my astute friend pointed out, how can Sprint get taken over and leave only 3 wireless carriers...that means prices go up | less choice | and maybe service declines.

The contrarian in me points out two simple facts: 1) Capitalism - the deal gets done b/c a lot of people stand to make a ton of money (it is convenient Sprint's commercials say they are doing well, but the Execs say the business is declining).  I do not usually have time to listen to quarterly conference calls but I found it MORE interesting that Sprint executives have been putting their houses on the market since the end of last year. How about the fact that the Corporate Office has already been sold. 👀 Strange this has all happened and the deal is NOT even complete as of this post.  2) Less Choice - Prices have been declining ever since T-Mobile took the American wireless industry by storm with good ole "competition". So you go with the contrarian view that Verizon, AT&T, and the market has had enough of its decline in revenue due to T-Mobile's entrance and the smart investment is for them to buy Sprint. The only thing is how do you sell it to the public. 😇 Well, the Department of Justice (DOJ) has supposedly negotiated a deal for T-Mobile to sell excess spectrum to another party to create a new 4th major wireless carrier. Wait for it...who can't wait to buy cell phone service from Dish Network 💪💪

Urb Lesson of the Day: Everything and everyone has layers. Take time to peel those layers and get to the obvious truths in life. I traded Sprint multiple times in the last 7+ months and tomorrow's announcement will eventually lead to the closure of my outstanding trades.  Disclosure: I own Sprint (S) and by trading from the bottom up...I followed everyday clues hidden in plain site to reduce my risk on what some called the "unlikeliest" deal to get done.

Executives Sell Mansions Before the Sprint Deal is Done: Follow the Mansion Money


And My Comments from May 2019:  And Sprint (S), Sprint keeps getting offers to play overseas for T-Mobile but the FTC (like the stock version of the NBA Commissioner) is telling me that the deal is unfair. Funny he doesn't say that to Verizon or AT&T the biggest cell phone carriers. Let a player get his money Commish?!?!  Approve the deal and let me bask in the glory of my draft pick prowess.

Linky: May 2019 Post on Sprint

#investandchill #Sprint #T-Mobile

Invest and Chill – How to Be a Portfolio Player

To be a player you have to learn from a player.  And I’ve read my fair share of books about players or as I call them, Original Investors’ in the stock game.  Please don’t get confused, they are not OGs or Original Gangsters, they are more of what I would call old heads or OIs  à Original Investors.  Ron Baron, Peter Lynch, Warren Buffett, and Mario Gabelli are just a few that come to mind.  In addition, I appreciate successful business people and investors who look like me. Some of those great businesspersons include: LeBron James, Jay-Z, Sean Combs, Dr. Dre, Oprah Winfrey (Sports & Entertainment) and Robert Smith, and John Rogers Jr (Financials and Investments). I remind people some of the same skills come in handy when running a business and investing in businesses. One might say: Game Recognizes Game

But back to the lecture at hand, I want to focus on an Original Investor name Mario Gabelli. He often jokingly calls himself “Dr. Love”.  Our generation might ask is Dr. Love the king of “Netflix & chill” or “swiping right”…no not exactly, he’s a player alright just of the stock market.  So what kind of player is this?? Well he often targets companies that will be acquired by another company.  Acquired/Merged/Bought Out…are just the stock market’s way of saying these two companies plan to hook up.  Companies that hook up in the stock market are usually a good thing because the company being pursued usually requires a lot of cash or stock for this to happen. 

So one of the things I challenge myself to ask while researching stocks is whether my stocks are “dateable”.  While it is not my main strategy, it helps to have this as an additional catalyst for a stock to do well.  I try to identify trends in companies being acquired and often ask: “Why is this stock so attractive to other companies?”, “Is this an industry trend that will continue?”, and quite frankly “who might be next”.  While it sounds a really bad dating show, it is important to understand if the company is a diamond in the rough, considered young and attractive, or could the company make company’s pursuing it BETTER.  Here is my Invest and Chill Portfolio:

Possible Themes Uncovered: Healthcare (rationale: all the talk of drug costs coming done??); Media (rationale: Content is king as everyone moves to streaming and online gambling); Technology & Telecom (rationale: young and attractive companies being bought, 5G coming soon??); Value (rationale: strong market means underperformers get bought out??)

Urb Update: Full Disclosure: I’ve owned all of these stocks as noted before; many are currently in the process of being acquired. Feel free to search the site for previous posts and commentary

#investandchill