|Back to main|
The Zacks Analyst Blog Highlights: AT&T, MetroPCS Communications, Leap Wireless International, Sprint Nextel and Verizon Communications - Press Releases
For Immediate Release
Chicago, IL - November 29, 2011 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include AT&T Inc. ( T ), MetroPCS Communications Inc. ( PCS ), Leap Wireless International Inc. ( LEAP ), Sprint Nextel Corp. ( S ) and Verizon Communications Inc. ( VZ ).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday's Analyst Blog:
Is AT&T/T-Mobile Deal Turning Sour?
The proposed $39 billion merger of AT&T Inc. ( T ) and T-Mobile USA seems unlikely. AT&T plans to take a $4 billion charge in the fourth quarter against its takeover, showing increased chances of failure rather than success.
Previously, upon the announcement of the merger deal in March, AT&T agreed to pay T-Mobile $3 billion in cash and $1 billion for spectrum access, should the deal fail.
The proposed transaction is also regulatory attack. First the Department of Justice (DoJ) and more recently the Federal Communications Commission (FCC) blocked the proposed takeover citing concerns of unfair competition, layoffs, higher prices, lower innovation and investments in the industry.
Nevertheless, AT&T was keen to bring T-Mobile under its fold in a deal that would to be the largest in the wireless industry since 2004. The second largest mobile phone company would continue to pursue antitrust approval from the DoJ but withdrew its application from the FCC. Notably, the FCC approval would be absurd should DoJ block the transaction.
The company is seeking to shed some assets or spectrums to rival companies in order to salvage its ambitious $39 billion purchase. AT&T would now divest a significantly large portion of assets than previously expected. Though the exact amount of disposal is not determined, it could be as much as 40% of T-Mobile assets, according to Bloomberg . AT&T could bring its asset sale proposal in the DoJ hearing on November 30.
AT&T affirmed that the sale of assets would minimize the merger concerns, helping it to gain necessary approvals. Divesture talks with several U.S. wireless carriers such as MetroPCS Communications Inc. ( PCS ), Leap Wireless International Inc. ( LEAP ) and Sprint Nextel Corp. ( S ) are in preliminary stages. Even if AT&T disposes assets to its rivals, it may still not be able to win the DoJ nod.
Ironically, the collapse of the deal might weigh on the smaller U.S. wireless rivals as they run the risk of losing opportunities to buy T-Mobile assets. The failure of the deal might turn T-Mobile into a more hostile competitor for urban prepaid users. T-Mobile, which is the fourth largest wireless carrier, is struggling to compete against Verizon Communications Inc. ( VZ ), AT&T and Sprint. The company is badly in need for additional spectrum to build the fourth-generation (4G) network, the demand for which is currently rapidly increasing.
While we await the final decision on this much-hyped merger, we prefer to maintain our long-term Neutral recommendation on AT&T. The company retains the Zacks # 3 (Hold) Rank for the short term (1-3 months).
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515 .
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518 .
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
LEAP WIRELESS ( LEAP ): Free Stock Analysis Report
METROPCS COMMUN ( PCS ): Free Stock Analysis Report
SPRINT NEXTEL ( S ): Free Stock Analysis Report
AT&T INC ( T ): Free Stock Analysis Report
VERIZON COMM ( VZ ): Free Stock Analysis Report
Zacks Investment Research