Seeking Alpha

Gerard Hallaren, CFA

 
View as an RSS Feed
View Gerard Hallaren, CFA's Comments BY TICKER:
Latest  |  Highest rated
  • Blackphone Takes Aim At BlackBerry [View article]
    The link you sent regarding encryption is a BES4 release.
    Dec 19, 2014. 07:13 AM | Likes Like |Link to Comment
  • Blackphone Takes Aim At BlackBerry [View article]
    KIA -- you are a smart guy. Why do you call attention to features of BES 4 and not BES 10 or 12?
    Dec 18, 2014. 08:16 PM | Likes Like |Link to Comment
  • Blackphone Takes Aim At BlackBerry [View article]
    Blackphone tumbling Blackberry is as likely as Blackberry tumbling Apple.
    Dec 18, 2014. 04:59 PM | 2 Likes Like |Link to Comment
  • Sprint And The Severe Market Overreaction, Part II [View article]
    Interesting comment. You elucidate plan B well. Two questions for you.

    1) Which is more important to network operators,

    Gross Revenue
    or
    ARPU?

    2) What is the elasticity of demand for mobile broadband service in the US?
    Dec 18, 2014. 10:50 AM | Likes Like |Link to Comment
  • Why 2015 Is Make Or Break For Sprint [View article]
    I think you can sell the farm now. But I've been wrong for a few weeks here.
    Dec 10, 2014. 04:11 PM | Likes Like |Link to Comment
  • Why 2015 Is Make Or Break For Sprint [View article]
    You may be right about Sprint headed back down. I don't think so, though every attempt to find a bottom has proven my optimism wrong.

    Verizon's pricing may not be at the premium levels you perceive. Based on reported ARPU, VZ has generally received prices above T-Mobile but below AT&T and Sprint. This strategy, along with the best network, gave VZ about the lowest churn, steadiest customer growth, and about the highest wireless segment oibda margins in the business.

    I would challenge you to think differently about your pricing and revenue analysis. Networks are fixed cost businesses. Incremental revenue means incremental profits. If the business is elastic, as I believe, lower prices will stimulate demand in excess of the price decrease. Revenue and margins will go up together. If mobile data demand is inelastic or unitary elastic, as you imply, higher prices would likely mean higher margins.

    Shoot me your email and I will share some data with you.

    G
    Dec 10, 2014. 04:10 PM | Likes Like |Link to Comment
  • Why 2015 Is Make Or Break For Sprint [View article]
    I enjoy your comments and thoughts.

    The low frequency auction is fraught with issues beyond spectrum for carriers. Public safety and free to air television are two very large concerns that influence this auction and its timing. Ping me if you want more info.

    Thanks,

    G
    Dec 9, 2014. 09:17 AM | Likes Like |Link to Comment
  • Why 2015 Is Make Or Break For Sprint [View article]
    What creates incremental margin in a high fixed cost business? higher prices or more revenue?
    Dec 8, 2014. 09:51 PM | Likes Like |Link to Comment
  • Sprint's Price War To Negatively Impact AT&T [View article]
    Service margins correlate with incremental revenue. So the relevant question is "how elastic is mobile broadband demand?"
    Dec 4, 2014. 08:32 AM | Likes Like |Link to Comment
  • Sprint's Price War To Negatively Impact AT&T [View article]
    Its the total service charge voice, text, and data.
    Dec 4, 2014. 08:29 AM | Likes Like |Link to Comment
  • Sprint's Price War To Negatively Impact AT&T [View article]
    I suspect you are right -- Sprint will give the new customer "the best trade in value" in the industry and pay any or all ETFs.

    Another thing worth considering is that with Sprint's "double the data" and unlimited price plans, its pricing is already a half or less than the oligopoly's.
    Dec 4, 2014. 08:27 AM | Likes Like |Link to Comment
  • Straight Path Communications Is Overvalued At Current Levels - Detailed Analysis Of Both Patent And Spectrum Assets [View article]
    I agree with you that not all spectrum has value. As I am sure you know, it is like real estate. The three most important things are location, location, location. Given STRP's concentration in top tier markets, I remain optimistic.

    Many had high hopes for mWave as an enabler for bad CLEC business models in the 1990s. The technology was not ready and the underlying business made no sense.

    Could you point us to other opportunities to buy undervalued spectrum? Your audience is always looking for more ideas.

    Cheers,

    G
    Nov 30, 2014. 06:22 PM | Likes Like |Link to Comment
  • Straight Path Communications Is Overvalued At Current Levels - Detailed Analysis Of Both Patent And Spectrum Assets [View article]
    As I've disclosed in other postings, I am long STRP.

    This article seems to be a rehash of one from November 4 http://bit.ly/1xMaQaH Could it rock the stock? maybe. STRP has been more of a rocket than I expected.

    Spending time on STRP's patents is like giving a fish bicycle lessons. I can't disagree with your analysis. However, your $2.50 per share value is $2.00 more than mine. I like to think of the patents as "carfare."

    My interest is in StraightPath's spectrum. You very accurately characterized several major applications for mWave. I am more optimistic than you about 5G and somewhat more optimistic about small cells. Today, neither 5G nor small cells are mainstream markets. StraightPath will have to compete with other frequencies to profit from these markets.

    I do wonder why you left out the mWave's largest application? I think the largest use is connecting buildings to the internet and each other in situations that do not justify fiber. While the carrier backhaul "experiments" you mention are the oldest applications, interconnect is a much larger market. I think this market has some legs. Why do you think it doesn't?

    My other question is why do you prefer to discuss MHz rather than MHz/POPs? Price per MHz/POP is the standard metric for spectrum pricing.

    The primary value of using STRP spectrum over other free or nearly free alternatives is that STRP can quickly give the operator access to a license. If everything goes well at the FCC its takes about 60 days and when things don't go well it can take even longer. I see mWave prices reflecting an early start rather than any long term network value.

    Right now, my sense is that the market for mWave spectrum is somewhere around $0.001 to $0.005 per MHz/POP. This is up from about half that 18 months ago. I believe that this had more to do with mWave spectrum market dynamics than the inherent network or time value.

    Mainstream mobile spectrum sells for $0.35 to $5.00 per MHz/POP depending on location and frequency. I had expected that the ongoing AWS-3 auction would demonstrate this and produce a national average Price/MHz/POP between $0.75 and $1.00. If you've been following this auction you know how wrong I've been. Current prices imply $1.85 per MHz/POP.

    Today, StraightPath sells for less than $0.002 (two tenths of a cent) per MHz/POP. If StraightPath was valued at just $0.01 (one cent) per MHz/POP the stock would be about $180 per share. If it approached the low end of today's market prices for mainstream spectrum the stock would be $6,300 per share. Is mWave worth anywhere near mainstream prices today? Absolutely not. I am guessing it will take a decade or two before mWave is in the mainstream.

    Do you want to get in the way of a fast moving spectrum demand train? -- I don't think so.

    During the next decade, I expect most mWave spectrum will increase in value. It will be at least 5 if not 10 years before StraightPath's spectrum reaches common parlance (like 2.5 GHz three years ago); and longer before it is a mainstream commercial solution.

    I think mWave spectrum prices are likely to climb during this time. Frankly, I'd be delighted at $0.005 per MHz/POP or $90 per share within 2-3 years.

    With PayTV operators looking harder than ever at wireless solutions and thinking about national deployments, I would not want to be short STRP.
    Nov 27, 2014. 12:43 PM | Likes Like |Link to Comment
  • Management shake-up at Sprint, chief marketing officer to leave [View news story]
    hescomingsoon -- watch the root metrics score they are improving and the more recent the test the bigger the improvement.

    Bill Brown I saw the 24+ reference too. I don't know if that number is good bad or indifferent. Certainly the company is not going to tell us. I suspect there are 13 directors, and some TBA members on the list of keepers.
    Nov 18, 2014. 04:00 PM | 1 Like Like |Link to Comment
  • After Recent Spike, Straight Path Could Fall 50% [View article]
    Fair comments on the patents and revenue. In an effort to gain spectrum revenue the company has formed several partnerships with radio companies to facilitate spectrum sales. This should start to move the needle next year. In the meantime, I would not wish to risk shorting this stock given the increasing likelihood of a sudden bid.

    Before the spin out, IDT had sold a chunk of spectrum to MetroPCS who uses it for backhaul. IDT refused to pay the commission to the salesperson responsible and this taints StraightPath. However, MetroPCS did pay for the spectrum.

    The company should file a definitive proxy within the next few weeks and we will then see if Davidi and Jonathan are enriching themselves at shareholder expense as you state.
    Nov 4, 2014. 09:39 PM | Likes Like |Link to Comment
COMMENTS STATS
271 Comments
282 Likes