All Sprint acquisition discussion (was "Japan's Softbank in talks for $12.8 bln Sprint stake")

[dedub]

Well it boils down to this; You bet on sprint shares being less than 3$ in January Since share prices have already done past $3, you can simply consider that you sold those shares for $3 + whatever you got when you sold the calls.

 

So, if you have 2000 shares total, 1000 are sold for $3 and you lose out any additional profit on those shares.

 

Meanwhile, the other 1000 shares (or whatever you got), you can keep, or sell for whatever price you can get (ie 7.30 whatever softbank final offer is).

 

You still made money, you just made alot less than you could have if share price had stayed under 3.

 

if it makes you feel any better, I had a bunch of sprint that I sold around $4.60 a few months ago that I am wishing I had held on to.

Edited October 15, 2012 by dedub

[Sgt. Slaughter]

Well, CNBC is calling it a done deal with the official announcement to be made tomorrow (Monday).

 

http://www.cnbc.com/id/49408877

 

If true I hope to also see immediate action by SPrint/SoftbANK (SPANK) to snaffle up control of Clearwire and their massive bandwidth licenses.

 

If that happens, it's a three horse race again.

 

I hope they don't touch clear more than they already do. Seizing full control would put sprint in terms of total bandwidth above others...it go es a false impression really and they would not be able to play the card they currently do when they say VZ and ATT own too much spectrum compared to Sprint and others...with taking over Clear that card can no longer be played and actually you could see VZ protest any sprint won spectrum auctions or additions showing sprint has the boatload from clear... In order to fully use that clear spectrum you know how many additional sites would need to be added to make up for the lack of coverage bc of the freq....a ton.

Best to let clear be clear and them do their thing just owning a piece of the pie instead of full control. Imho

 

Sent from my EVO using Tapatalk 2

 

 

[Ascertion]

 

I hope they don't touch clear more than they already do. Seizing full control would put sprint in terms of total bandwidth above others...it go es a false impression really and they would not be able to play the card they currently do when they say VZ and ATT own too much spectrum compared to Sprint and others...with taking over Clear that card can no longer be played and actually you could see VZ protest any sprint won spectrum auctions or additions showing sprint has the boatload from clear... In order to fully use that clear spectrum you know how many additional sites would need to be added to make up for the lack of coverage bc of the freq....a ton.

Best to let clear be clear and them do their thing just owning a piece of the pie instead of full control. Imho

 

Sent from my EVO using Tapatalk 2

I don't understand much of these regulations, but wouldn't Sprint be safe because of their plans to rollout lte advanced on Clearwire towers?

[ks-man]

You won't be able to sell 70% of your stock, you can only sell the stock that is not under a covered call. Unless perhaps if you did a naked call. But if you did that you will have to buy enough stock (at whatever price you can get) to cover those calls.

 

you would either;

 

a) do nothing and sell those lots for $3, so you will keep the .60c per share profit + whatever you got paid for your covered calls.

 

b. try to close those covered calls, this will likely cost you more than you got paid for them (you will be losing money) but you will get to keep your shares, which ideally if the price goes up high enough may offset what you have to pay to close your calls.

 

c) depending on share price vs options price (and if you have the cash or margin available), it might be better to try to buy new shares to replace your covered calls.

 

You're essentially explaining what I can do as if this purchase wasn't made yet the market was implying a $7.30 price for the stock. This is from the CNBC article:

 

"and tender for another $12 billion worth of the shares from existing holders at a price of $7.30 a share,"

 

It makes it sound to me like all current shareholders of Sprint stock will be selling 70% of what they own to SoftBank at a price of $7.30. I'd imagine this would happen automatically. If that is the case they usually just take a look at outstanding shares and don't take into account open options positions. So if I own X shares of Sprint but 50% of those shares were used to write covered calls I still think 70% of my total shares would be sold automatically to SoftBank.

 

Just guessing here. I could buy back those calls (or the number of shares those calls imply) but it doesn't seem like a smart move since it will be priced pretty close to the $7.30 and if the deal falls through I've basically paid the max price.

[Guest 503ducati]

Well, CNBC is calling it a done deal with the official announcement to be made tomorrow (Monday).

 

http://www.cnbc.com/id/49408877

 

If true I hope to also see immediate action by SPrint/SoftbANK (SPANK) to snaffle up control of Clearwire and their massive bandwidth licenses.

 

If that happens, it's a three horse race again.

Post #236 already has that link.

[dedub]

"and tender for another $12 billion worth of the shares from existing holders at a price of $7.30 a share,"

 

It makes it sound to me like all current shareholders of Sprint stock will be selling 70% of what they own to SoftBank at a price of $7.30. I'd imagine this would happen automatically.

 

I've only been playing the market for a couple years, but no it does not happen like this.

 

What it means, I am pretty sure, is that all sprint shareholders will get an email from their broker with softbanks offer of 7.30 (or whatever it will end up as). You will *choose* whether to sell your stocks to softbank, or you can keep them.

 

The 70% means that once they reach 70%, the offer will terminate and if you did not already accept the offer then you will have to keep your stock.

 

 

If that is the case they usually just take a look at outstanding shares and don't take into account open options positions. So if I own X shares of Sprint but 50% of those shares were used to write covered calls I still think 70% of my total shares would be sold automatically to SoftBank.

 

the 70% applies to the sprint stock as a whole, not yours in particular.

 

If stockholders do not accept the offer, and softbank does not get their 70%, then I would expect that either they will go with whatever they got and either buy market price (which will likely be even higher than 7.30 at that point), or they will have some type of exit clause that scuttles the whole deal (or partially).

 

Just guessing here. I could buy back those calls (or the number of shares those calls imply) but it doesn't seem like a smart move since it will be priced pretty close to the $7.30 and if the deal falls through I've basically paid the max price.

 

Well, really it depends on how far above or below 7.30 the stock ends up in january. If it flat lines at ~$7 or if goes up or drops after softbank buys the amount of stock they need.

 

Let's say you closed out your calls buy paying $4. That would put your cost back @ around $7 but for whatever reasons the stock goes up to 8 or 9 or even higher.

 

On the other hand, as you said, i you paid $4 and the stock dropped back below $7 you would lose twice (by closing out your call, and the fact you could have had whatever profit from selling @ $3).

[WiWavelength]

I hope they don't touch clear more than they already do. Seizing full control would put sprint in terms of total bandwidth above others...it go es a false impression really and they would not be able to play the card they currently do when they say VZ and ATT own too much spectrum compared to Sprint and others...with taking over Clear that card can no longer be played and actually you could see VZ protest any sprint won spectrum auctions or additions showing sprint has the boatload from clear...

 

Maybe. As much as I despise the asshat George W. Bush administration Powell/Martin controlled FCC, their established spectrum screen makes attributable BRS 2600 MHz spectrum limited to 55.5 MHz. EBS 2600 MHz spectrum -- because it is only leased from educational institutions -- is not counted toward the spectrum screen.

 

The problem is that the carrier asshats -- VZW, AT&T, and now, NewCo -- will pronounce to investors not to worry, will tell the public that BRS/EBS 2600 MHz spectrum is crap. Then, the two faced asshats will protest to the FCC that SoftBank-Sprint-Clearwire controls too much crap. This industry is so disingenuous.

 

AJ

[ks-man]

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I've only been playing the market for a couple years, but no it does not happen like this.

 

What it means, I am pretty sure, is that all sprint shareholders will get an email from their broker with softbanks offer of 7.30 (or whatever it will end up as). You will *choose* whether to sell your stocks to softbank, or you can keep them.

 

The 70% means that once they reach 70%, the offer will terminate and if you did not already accept the offer then you will have to keep your stock.

 

 

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the 70% applies to the sprint stock as a whole, not yours in particular.

 

If stockholders do not accept the offer, and softbank does not get their 70%, then I would expect that either they will go with whatever they got and either buy market price (which will likely be even higher than 7.30 at that point), or they will have some type of exit clause that scuttles the whole deal (or partially).

 

 

Well, really it depends on how far above or below 7.30 the stock ends up in january. If it flat lines at ~$7 or if goes up or drops after softbank buys the amount of stock they need.

 

 

No, I'm sorry but it certainly won't occur in this way. If a deal is reached where SoftBank pays 7.30 for 70% of the company that is the price. Letters don't get sent out and individual shareholders aren't given a choice. Either more shares are offered thus existing shares are diluted or shareholders are forced to sell at the determined price.

 

And SoftBank doesn't have the chance of paying more or less for their 70% depending on market factors. A deal is struck and SoftBank would pay $20billion for the agreed stake in the company.

[dedub]

Letters don't get sent out and individual shareholders aren't given a choice.

 

I guess we won't know for certain until tomorrow or whenever the deal is publicly announced, but the handful of buy outs I have had happen to stocks I hold always gave me the option of accepting the offer or not.

 

I have never had a 'forced' buy out, although kraft foods recently split into 2 companies and split out into 2 separate stocks which I didn't have any option or control over the split values.

 

 

edit:

I am guessing that if indeed there is a forced sell, what will happen to your calls is they will be exercised and you will get paid the $3 and no longer own them.

 

Then you will be forced to sell 70% of your remaining position for the $7.30 offer.

 

So, assuming 1000 shares exercised @ $3 = $3000, + the other 1000 70% (700 shares) is sold for $7.30 = 5110, leaving you with $8110 cash and 300 remaining shares of sprint.

 

If you can close out your calls for less than $4, you would keep those shares to be sold as part of the 70% @ 7.30 and eek out a little more profit along with ending up with more shares remaining owned.

Edited October 15, 2012 by dedub

[S4GRU]

I just got an email Press Release from Sprint. Looks like they are going to announce this deal in just under two hours from now. Wow, this is really early in the morning:

 

Sprint Nextel Corporation has posted the following release to its Newsroom website:

 

Sprint to Hold Webcast

 

OVERLAND PARK, Kan. (BUSINESS WIRE), October 15, 2012 - Sprint (NYSE: S) will hold a special webcast at 4:00 a.m. ET on October 15, 2012. Interested investors, analysts and media should monitor the Sprint website at http://newsroom.sprint.com/news/ at approximately 3:55 a.m. for a link to the webcast for this special event. For those unable to view at this time, replays will be available.

[Tomas]

News Releases

 

 

15 October 2012

 

Sprint to Hold Webcast

 

OVERLAND PARK, Kan. (BUSINESS WIRE), October 15, 2012 - Sprint (NYSE: S) will hold a special webcast at 4:00 a.m. ET on October 15, 2012. Interested investors, analysts and media should monitor the Sprint website at http://newsroom.sprint.com/news/ at approximately 3:55 a.m. for a link to the webcast for this special event. For those unable to view at this time, replays will be available.

 

• • • • • •

 

http://newsroom.spri...article_id=2418

[Guest 503ducati]

News Releases

 

 

15 October 2012

 

Sprint to Hold Webcast

 

OVERLAND PARK, Kan. (BUSINESS WIRE), October 15, 2012 - Sprint (NYSE: S) will hold a special webcast at 4:00 a.m. ET on October 15, 2012. Interested investors, analysts and media should monitor the Sprint website at http://newsroom.sprint.com/news/ at approximately 3:55 a.m. for a link to the webcast for this special event. For those unable to view at this time, replays will be available.

 

• • • • • •

 

http://newsroom.spri...article_id=2418

Check the post right before you.

[Tomas]

Check the post right before you.

 

Yup, wasn't there when I started posting mine, Ducati, but was there by the time I cleaned up the links from the Sprint News Release so they were actually usable. Thanks for letting me know I was a few minutes late by the time my post was corrected.

 

I'm leaving my post anyway.

 

Have a great night!

 

Tom

[Thomas L.]

If anyone is awake, Softbank is having a press conference as we speak:

 

www.softbank.co.jp/en/news/info/2012/20121015_01/

 

Sent from my SPH-L710 using Xparent ICS Blue Tapatalk 2

[Substantive]

lol, just gettin slammed! How often does the web page of a tier 1 go "service unavailable”?

[MacinJosh]

lol, just gettin slammed! How often does the web page of a tier 1 go "service unavailable”?

 

Rarely! This is crazy.

[delta772er]

Rarely! This is crazy.

lol, just gettin slammed! How often does the web page of a tier 1 go "service unavailable”?

 

Same here, Ustream video available here via Softbank:

Video Stream

[MacinJosh]

So the last minute leak is quite accurate so far.

[Substantive]

Same here, Ustream video available here via Softbank: http://www.ustream.tv/softbankcorp-eng

Nice, thanks!

[iansltx]

4am ET is 5pm in Japan, probably after the market on which SoftBank is traded has closed.

 

I tuned in a couple minutes ago and didn't catch anything particularly earthshattering. I'll probably rewatch the presentation in the AM; it's on UStream.

 

EDIT: Wow...Dan Hesse is a LOT taller than the SoftBank head.

[MacinJosh]

According to Sprint's newsroom, the new company will be called New Sprint, and existing Sprint will become a wholly owned subsidiary.

 

http://newsroom.sprint.com/article_display.cfm?article_id=2420

[MacinJosh]

Reuters is already receiving reports that Softbank has already been approved for loans for $21.1bln.

 

http://finance.yahoo.com/news/banks-ok-21-1-billion-052434413.html

[Tomas]

Short version:

News Releases

15 October 2012

 

SoftBank to Acquire 70% Stake in Sprint

• Sprint Stockholders to Receive Total Consideration of $12.1 Billion in Cash and 30% Ownership in Newly Capitalized Sprint
  
• Transaction Provides Sprint with $8.0 Billion of New Capital
  
• Sprint to Leverage SoftBank’s Experience in Deployment of LTE as Sprint’s Nationwide Rollout of 4G LTE Continues
  
• Significant Investment in the United States by One of the World’s Most Successful and Innovative Companies
  

Sprint will host an investor conference call to discuss the transaction at 8 a.m. ET today. Participants may dial 800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and provide the following ID: 44906693 or may listen via the Internet at www.sprint.com/investors

 

• • • •

 

http://newsroom.sprint.com/article_display.cfm

[Tomas]

The combined company is just the right size...

 

 

Sent from Photon Q LTE - Tapatalk

 

 

[Substantive]

Arrrgh, wanna listen to q&a..... Must sleep