Editor's Note: Our veteran Telecom and Media Policy analyst Paul Glenchur made an "epic" contrarian call on the T-Mobile/Sprint merger beginning in July of 2017 (see below). More recently, he spent two weeks in the courtroom listening to the carriers and the plaintiff state attorneys general make their arguments before Federal Judge Victor Marrero in the antitrust challenge to the T-Mobile-Sprint merger. "We continue to give the edge to the carriers," he wrote after the closing arguments were heard.
To be clear, his conviction and probability of the judge ruling in favor of the deal rose to 70% following the trial when other analysts were fading the likelihood of the deal getting approved.
Earlier today, Glenchur's prescient call was proven correct when Judge Marrero formally ruled in favor of the deal, which will combine the third- and fourth-largest US wireless carriers.
If you are an institutional investor interested in accessing Glenchur's research email sales@hedgeye.com
here's WHAT Glenchur WROTE ON 7/21/17:
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We think the consensus view among investors is that a Sprint/T-Mobile deal would probably be rejected by the regulators. We're more optimistic on Sprint/T-Mobile clearance. We agree that a Sprint/T-Mobile combination would not be an easy sell, but at the same time, it's a reasonable assumption that the odds of winning approval have improved under the new Administration. A mainstream Republican antitrust chief is nearing Senate confirmation and FCC Chairman Ajit Pai is far more open-minded, explaining that, in his view, the wireless market is competitive (in contrast to his predecessor, Tom Wheeler). Moreover, Chairman Pai has no presumptions about wireless market structure or the "right" number of nationwide carriers that should serve the market. Conventional thinking among former Justice Department officials (both Democrats and Republicans) is that a Sprint/T-Mobile proposal has, at best, an even shot (50-50) of getting past the antitrust enforcers. These impressions take into account the assumed antitrust policy disposition of Makan Delrahim, the President's nominee to head the Antitrust Division. He breezed through the Senate Judiciary Committee only to join other Administration nominees experiencing a backup in the full Senate. We are closer to 60 to 65% likely that a T-Mobile/Sprint combination would win ultimate regulatory clearance. |
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