Odeon Thinks Softbank is the New Straight Path (STRP) Bidder; Pounds the Table on Globalstar (GSAT)
April 25, 2017 9:07 AM
Odeon analyst Jahanara Nissar believes Softbank is the new bidder for Straight Path Communications (NYSE: STRP), which she said "speaks to the value of Spectrum."
Commenting on why she thinks its Softbank, she notes:
1. For one, the bidder is “International”.
2. My thinking is that Softbank/S have strategized beyond TMUS – like many news articles have suggested and has its eyes on possibly becoming a significant consolidator of Spectrum. Sprint has a lot of 2.5Ghz (infact the most 2.5Ghz held by any US carrier) and 2.5Ghz is good for 5G and STRP’s spectrum is for 5G backhaul – like Lego its can all starts to fit together with STRP’s spectrum.
3. Also keep in mind that Masa has raised a $100B fund to acquire assets like spectrum and this falls squarely into that plan.
As a result of the bidding war for Straight Path, she is also" pounding the table" on Globalstar (NYSE: GSAT), citing:
1. Softbank has been rumored to be one of the parties talking to GSAT to provide dollars for the capital raise they are likely to do in the June time frame. if Softbank or another high quality strategic/financial player make a capital contribution it will be a needle mover for GSAT.
2. Also, GSAT has been absent from M&A conversations as it’s airwaves were not yet approved by the FCC – That is no longer the case. Players involved in the Broadcast Auction were barred from talking directly to each other for 1 year at least. That quiet period ends April 27th at 6PM! Any mention of GSAT should take the stock meaningfully higher with a 20% short Interest. (higher if you adjust for the CEO’s full ownership) – The squeeze could be painful!
3. Last night TMUS bragged that it now has Spectrum to cover “every single inch” in the US, leaving its competitors gaping. GSAT’s spectrum does not solve a carriers 5G problem but it certainly plays heavily into Small Cell Densification which helps 4G coverage. The unlimited plans have only just started to kick in and Spectrum & VZ”s LTE network has already slowed by 14%!
