05-21-2021, 05:12 PM
(05-21-2021, 10:53 AM)Otter Wrote:Your scenario is not attributing any value for the shares received in the new spinoff?(05-21-2021, 06:29 AM)NilesMike Wrote: I would not leave T for dead just quite yet.
"New" T w/o a large part of their debt, focused on T business, along with shares of the new entity may just work out well.
4%+ yield with the offer of growth is not bad.
I'd rather avoid the 16% drop in equity to $25/share (my guess as to where it ends up after slashing its dividend nearly in half). Lots of ETFs and other funds that own T as an aristocrat will be forced to divest, and a number of DGI investors who have relied on T as a big chunk of their income will do the same (likely well in advance, hence the drop from the recent $32+ highs as soon as the merger/spinoff was announced). There will be additional carnage in the stock price when the cut occurs.
So, I'm out. T is already in third place when it comes to 5G spectrum, and will be playing catch-up for years. Cooking up a merger/spinoff of an asset that was supposed to be a cornerstone of the business model just 18 months ago, and alienating your core shareholders in the process, is a sure sign of management that is inept (at best). I may invest in the HBO Max/Discovery SpinCo as a growth company once it debuts, but T is giving me strong GE/IBM vibes.