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  • In an FAQ about the Sprint (S -1%) deal, Clearwire (CLWR +0.9%) hints the transaction could lead to layoffs. Meanwhile, activist investor Crest Financial, which is staunchly opposed to the deal, says it now owns 8.34% of Clearwire's Class A shares, up from a prior 6.62%. But with shares trading nearly 3% below Sprint's $2.97/share offer price, the Street isn't currently betting on a higher bid arriving. Comcast and Intel say they'll sell to Sprint at $2.97 regardless of whether the deal goes through. (more[View news story]
    I applaud Crest for trying to get a better deal. There's no basis for a lawsuit against them that I can see. It would be judged frivolous. Furthermore, Sprint is not going to let Clearwire go anywhere else.

    While we've seen the arguments that the high frequency spectrum is just not as valuable as 700MHz, I think exactly the opposite is true. Prices of base stations are dropping like rocks as carriers and NEPs try to maintain competitive advantage. You may truly need 7x the base stations at the higher frequencies, but, given Shannons Law, you will have 3.5x the available bandwidth per MHz, and far more clear MHz to use. What this boils down to is: If you want to deliver multi-megabit video quality speed to more than a few users per pop - forget about 700 MHz - it just won't scale - ever!

    That means, the real future lies in >2GHz. Period. There is really no question about this - only negotiating posture. Sure, you need more AP's but they're far less that 1/7th the cost of c.2005 base stations and profound cost reductions are clearly coming. And think about how you can better tailor coverage, particularly in urban environments.

    The future is in high frequency, low cost, WiFi enhanced base stations at >2GHz, and Clearwire currently owns a big chunk of that real estate. All investors are asking for is honesty and a fair deal.
    Dec 19 01:18 PM | 2 Likes Like |Link to Comment
  • Annaly Capital Management (NLY) declares $0.45/share quarterly dividend. For shareholders of record Dec. 28. Payable Jan. 29. Ex-div date Dec. 26. (PR[View news story]
    Date of Record is typically 3 days after Ex - the typical settlement period. Isn;t that right?
    Dec 18 05:33 PM | Likes Like |Link to Comment
  • Sprint's Attempt To Buy Clearwire [View article]
    I'm not sure you understand the economics of spectrum, but ignoring that, pointing out that all these others place little value in CLWR is not very meaningful. If I need a 2" U-bolt in order to recognize $20,000 in revenue on a tower, I'll pay dearly for that U-Bolt, while my neighbor, who either doesn't really need one, or does, but has her own, will not pay so dearly. This is a good analogy for this deal. Sprint, Softbank, maybe Dish, all value CLWR's spectrum. For all the others, it's just an investment, and they saw opportunity costs elsewhere. It's really that simple. And you neglected to remember that MCCaw gets a sweetheart deal on the buyout price. He got cash for whatever arbitrary number Hesse pinned on his equity, and then will get a bump to full price whenever the deal closes.

    The retail stores, however, I agree with you - that was a dumb idea, both then and now.
    Dec 18 11:53 AM | Likes Like |Link to Comment
  • Sprint's Attempt To Buy Clearwire [View article]
    That depends on where you measure the starting point. You choose to measure it at $1.30 or $.83. Others choose to measure it at $17. Somewhere in between is clearly the right place, and apparently, Hesse thinks that place is $2.97. I don't, but I do agree that $2.97 is better than T and VZN laughing their keisters off at Sprint and Softbank for a percentage point or two. These will be the real losers in the larger scheme of things.
    Dec 18 11:41 AM | Likes Like |Link to Comment
  • Sprint's Attempt To Buy Clearwire [View article]
    Bingo! Hesse is a good businessman and has done a lot of really crafty things. Better when your interests are aligned with his!

    That said, he's not dealing with idiots. A fair price level will be achieved or all three (four, really, when you include investors) will lose. Something Hesse may allow to happen, but Son will not.
    Dec 18 11:38 AM | Likes Like |Link to Comment
  • Sprint's Attempt To Buy Clearwire [View article]
    "At this point, Clearwire needs Sprint more than Sprint needs Clearwire" is wrong. When you look at where Sprint and Softbank own spectrum and the technology they use, CDMA, (read Equipment costs and homogenization) you can see that without CLWR's spectrum, Sprint is in a box that it can only get out of by changing technology, a Nextel-like problem, to be sure.

    Clearwire certainly doesn't have many options, that is true, but neither does Sprint, really! The large CLWR holders know this.

    As to Softbank holding firm at $2.97 - yeah right! While Softbank is not as exposed if Sprint loses CLWR, it does miss out on a huge opportunity cost - namely, a crack at being the dominant carrier in the US. $2.97 is a negotiating point and will dissolve under pressure. Why do you think that Sprint recently made the token move from 48% to 50.1% (I'm not asserting those are the real numbers, but you get the point...). There is no way in Hades that Sprint is going to let CLWR get away unless the CLWR investors get stupid.

    My take is that $2.97 is not fairly valuing Clearwire. Clearwire is worth twice that, but if Sprint can make it stick, good for them! I win either way.
    Dec 18 11:33 AM | Likes Like |Link to Comment
  • It would be "an absolute outrage" for Clearwire (CLWR -0.8%) to be sold at Sprint's (S -0.8%) $2.90/share offer price, declares 3.6% activist Clearwire owner Mount Kellett in a letter to the board. To further demonstrate its commitment to fighting for a higher bid, Mount Kellett assigns Clearwire a value of $6.30/share based on some back-of-the-envelope math that values the carrier's spectrum at $18B. Fellow activist investor Crest Financial is also intent on receiving a higher offer. (earlier) (Nov. letter[View news story]
    $2.90 is too low. Apparently Sprint thinks either it's position is defensible, or no others are going to be interested. I think that might be a bit myopic, if true. If that spectrum is truly as valuable as we all think it is, there will be many interested parties that can easily do the deal, liquidate the operation and debt, and have spectrum. The math on that has to be north of $3.
    Dec 14 01:59 PM | Likes Like |Link to Comment
  • Clearwire (CLWR +12.5%) soars to to $3.10 on news of Sprint's (S -1.1%) $2.90/share offer. Wells Fargo views Sprint's initial bid as a starting point for negotiations, and so, apparently, do many others. At $0.17/MHz.-pop, other spectrum deals have involved 50%+ premiums to the implied value of Sprint's offer, the firm notes. Though not 100% comparable, Verizon's cable spectrum purchases cost $0.68/MHz-pop[View news story]
    Didn't some investors pay $17 just a few years ago? $2.90 seems low - way low.

    Not sure I agree with Wells about starting point. If Sprint owns >50% of the shares/BoD seats, who else is going to step in to bid? Also, Management might see this as a slap, but Sprints stock price is equally undervalued, so swapping one for the other might not be seen as a bad thing.

    What to do...
    Dec 13 10:40 AM | 2 Likes Like |Link to Comment
  • Annaly Capital Could Be A Very Risky Investment Now - Stay Away [View article]
    You too, RS. Great article. It stimulates excellent thinking and discussion. I'm sure you would not be sad to ultimately be wrong at all! And if you're right, I'll be the loser, for sure.
    Nov 19 06:11 PM | 1 Like Like |Link to Comment
  • Annaly Capital Could Be A Very Risky Investment Now - Stay Away [View article]
    Twist - I understand this space fairly well and added 20% to my portfolio last week. My personal reasons were a) the fed was going to scare everybody, b) MF's death would weigh on institutionals, c) insiders are buying, d) they announced a share buyback right about the time that MF died, and e) all the bloggers are talking about the long/short spread as an issue when it doesn't even apply here.

    To be sure, the Fed might cause prepayments to rise, but that can't possibly hurt NLY, assuming they're managing for it. Keep in mind that the fed is not buying the entire market. They have no track record of buying astutely either. They don't really care about that. They want to grease the credit market to get the economy moving. I can manage around that, for heavens sake. A team of analysts armed with good data, fast computers, a finger on the pulse of the business, and years of experience certainly can do that too.

    Lastly, one has to consider what the fed wants to accomplish and understand that NLY is one of the cogs in the transmission mechanism. To what end would the fed damage it's own transmission?
    Nov 19 06:08 PM | 1 Like Like |Link to Comment
  • Annaly Capital Could Be A Very Risky Investment Now - Stay Away [View article]
    I'm not sure an upgrade from a Well Fargo analyst is anything other than a sell fast signal. That said, your description of a long spread is a bit wrong, I think.

    This is not the spread between the long bond and the short. It's the spread between a portfolio of mortgage backed securities and the short. That's a big difference because the long bond is perfectly liquid and the MBS terms are fixed. So the short rising is bad for NLY to an extent, but the long falling is not directly consequential. Indirectly, it might effect prepays, but then NLY exits the long side of the spread and all risk disappears. The only remaining risk is the ability to buy a new MBS at as good terms. If you can't do that, you return capital to the market - no stress, no foul.

    Now, if the short rises too much, that could be a problem, but that is not apparent in the numbers.

    So, in fact, there appears to be little more risk than before QE3.

    Does this make sense?
    Nov 19 02:28 PM | Likes Like |Link to Comment
  • Sprint to Retire $2.28 billion of 2014 and 2015 Debt Maturities [View article]
    I hope these are the high interest ones we saw from a past poster!
    Nov 9 01:10 PM | Likes Like |Link to Comment
  • Annaly Capital Management Sees Interest Spread Drop By Half Since Last Year [View article]
    a 30 cent dividend is a 7% annual yield. Oh, the pain!
    Nov 6 12:06 AM | Likes Like |Link to Comment
  • Sprint's A More Desirable Telecom Acquisition Than Nokia [View article]
    NSN seem to be competing extremely well in it's sector. I've taken a small position in NOK because of NSN. Those darned handsets are such a fad business, though, that one day you're on afterburners and the next, you're fish bait. Can't see MSFT helping the handset business at all.
    Nov 5 03:26 PM | Likes Like |Link to Comment
  • The Perfect Storm Hits OCZ: Lack Of PC Demand To Impact Delayed Q3 And Q4 Revenues [View article]
    No - Actually, it's writing it off. The difference is how much salvage value they can keep.

    If they had said things like 'scaling back production' or 'rightsizing' I'd agree with you, but the words were "discontinue approximately ..." and "monetizing some inventory"
    Nov 1 12:26 PM | Likes Like |Link to Comment