You are correct.Charismatic Megafauna said:austinAG90 said:
Corporates...Dominated by the massive ATT deal yesterday of 30 billion... Orders were over 106 billion... This continues to show demand ...
So far so good farmer...means the big money was clamoring to get a piece of this, right?
The stock has been professionally driven down and coupled with a smear campaign over the last 10 months. I realize Stankey is not the brightest CEO, but Stankey is not bigger than AT&T and savvy investors know this. Weak hands sold shares cheap and they'll regret it within 12 months. T will rebound and WBD will explode.
If T stock was such a poor equity(trash) you would not see $106 billion bid coming after $31.5 billion bonds. The caveat is, bond holders are usually secured whereas shareholders are not. (Bond vs Share = Safety vs Risk)
Tomorrow is an AT&T investor call. Stankey is talking and the stock reacts just like the Market does when Powell opens his mouth. The AT&T call will overlap with the Discovery vote to do the WBD deal. The WBD deal will happen - John Malone and other majority shareholders will vote for it. It's a formality. I suspect we'll hear more details about the deal tomorrow <hopefully>
T book value is $23.29/share. It's trading at $22.98 right now.
My model has projected the DISCK spread premium has to be within $1.00 per share of T for this WBD deal to be "fair" to DISCK shareholders. That spread premium was as wide as $6.50 to $7.00 and has slowly narrowed to $1.64 today over the course of 100 days. Accounting for slippage, it may stop at $1.50 spread premium but I doubt it. It really needs to be $1.
After Warner Media leaves AT&T, there will be an accounting entry with the asset removal, likely $6 to $7 a share. That does not mean that T stock will trade at $16 or $17 ($23 - $6) the Market Makers will be buying hand over fist because the earlier announced dividend cut would yield 6.5% ($1.11 Div @ $17 share) and who wouldn't want to own that in this environment? After the spinoff I see T "trading" at $20, not $17. The WBD shares are....sky is the limit over the foreseeable future. You receive .24 shares of WBD for every share of T and you retain all T shares. NFLX hasn't had a competitor coming into the business like WBD will be. Heck, if NFLX drops to $150/share and WBD moves to $150/share I'll be more than happy. I'll maintain my T shares and just churn dividends at 6.5%($17/share) to 4.50%($24.55/share). T is solid as a rock. Stankey/CEO...if "he got quit" the stock would zoom upward.
Hope this helps you.
