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
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