MetroPCS Communications, Inc. (PCS)

[bowonwing]

About $13.40, "fair value." James Moorman at S & P raised his PCS target price to $13 from $11 on 10/5/12; still has a "Hold" rating; values deal between $11.50 to $13.50 a share. He also said he thinks Sprint will not offer a competing bid for PCS.
William Power with R.W. Baird has a $12.60 to $16 value per share for PCS.
Craig Moffett at Sanford Bernstein has "an optimistic view" of $18, with the $4 per share in cash.
Walt Piecyk with BTIG LLC has a $15 to $16 value.

Taking out the high and low estimates provides a $13.40 value for PCS.
($12.50 + $14.30= $26.80; div by 2= $13.40; (note these numbers are the averages of the estimates)

[bowonwing]

$12.65 Friday close after T-Mobile "merger" deal announcement this week.

So "Mr. Market" has spoken (for now) on the value of PCS in the T-Mobile "merger" deal.

This is just about in the middle of S & P's (Moorman) range of value of PCS between $11.50 and $13.50 in the deal.

[bowonwing]

S & P changes P.T. to $13 from $14 on 10/5/12. Moorman at S & P says the deal values PCS between $11.50 to $13.50 a share. He also said he thinks Sprint will not offer a competing bid for PCS.

[bowonwing]

Value of $11.28/shr: Per a Reuters article on 10//4/12, that is what Pacific Crest analyst Michael Bowen values the T-Mobile offer for PCS. He also stated that if Sprint makes on offer for PCS they "could pay between $12.50 and $15 per share by offering its own stock as payment."

[bowonwing]

"Why MetroPCS is Truly in Play:" http://dealbook.nytimes.com/2012/10/04/why-metropcs-is-truly-in-play/?partner=yahoofinance&pagewanted=print

[bowonwing]

S&P ups target to $14. Moorman at S&P today raised PCS' target price from $11 to $14.

[Cassius Clay]

Careful folks. These acquisitions can take a very long time and bring many complications. Not telling you to stay away, just tread carefully.

[Dudebud]

Clearly the market is skeptical about this deal if not downright cynical.

[bowonwing]

"DT's exit strategy": http://seekingalpha.com/article/901981-how-dish-could-win-the-pcs-t-mobile-prize?source=yahoo

read the comments at the end of the article. The author states a PCS T-Mobile merger makes no "strategic sense."

[bowonwing]

Well, time will tell. I just have a hard time thinking that Linquist would throw PCS under the bus. PCS was his baby and he is holding a lot of shares.

At least most of the analyst's (what ever their worth really is), have a range for the value of PCS from about $12.50 to $16 (the $18 was with the $4.06 per share in cash- so actually $14).

Yesterday we could have sold at about $14, so that is what I am looking for now. Best to you and GL.

[JammingJAY]

I would hope the cash was to be used to improve the network.

My research leads me to both PCS and TM are going down due to folks jumping ship(some say iPhone) this deal appears to be a means to survive with a twist.

DT wants to own the new company as an asset on their books while removing all the liabilities.

DT and PCS BOD slams PCS shareholders, DT hands over some TM hardware and customers while taking control of 75% of the new companys reduced float stock(whatever it will be in 2015, if it survives). DT will have total control of the PPS.

No wonder the lawyers are fighting for the class. I don't think the regulators will approve these shenanigans.

I'm thinking PCS and TM are done. S is broke, T and V would love it.

Just a matter of time.

[bowonwing]

from PCS website: October 3, 2012
To our Valued MetroPCS Customers:
Today marks an important milestone in MetroPCS history and an exciting, positive step for our company. This morning we announced that MetroPCS has entered into a definitive agreement to combine our business with T-Mobile USA. The combined company will be called T-Mobile, and will continue to operate MetroPCS and T-Mobile as separate customer units.
This combination will create the leading value carrier in the U.S. marketplace that we believe will deliver a better experience for our customers.
This can be accomplished through a wider selection of affordable products and mobile services, while leveraging the latest 4G mobile technologies, deeper network coverage and a clear-cut technology path to one common 4G LTE network. On our website you will find a copy of the press release we issued, along with a list of frequently asked questions.
What This Means for MetroPCS and Our Customers
T-Mobile, a subsidiary of Deutsche Telekom, is a leading telecommunications company that offers a range of wireless services to consumer, business and government customers.
Through this combination, we expect to improve mobile experiences by:
Creating a faster, broader, higher capacity 4G network;
Offering wider handset choice and lower costs by building on our combined portfolio of cutting-edge products and mobile services; and
Enhancing our national footprint and offering international roaming options.
Deutsche Telekom and T-Mobile have announced publicly that they intend to grow the MetroPCS brand, both through extension into new geographic areas and through the introduction of a broader product portfolio into our existing network. Importantly, MetroPCS and T-Mobile have the same network strategies and LTE networks in the same spectrum bands, which we believe will accelerate the deployment of advanced services to our customers.
In short, this transaction is expected to offer you a wider selection of affordable handset products and services, and broader and deeper network coverage – in even more cities!
What Happens Next
We believe this combination will best position MetroPCS for long-term success, supported by the best talent in the industry. However, until the transaction is complete, MetroPCS and T-Mobile will be, and continue to operate as, independent companies.
Our commitment to you is unwavering, and we will continue to be the nation's leading provider of no annual contract, unlimited, flat-rate wireless communications services. Rest assured, we will continue to work hard to exceed your expectations.
We encourage you to read the list of frequently asked questions (FAQs) posted on our website. Of course, if you have further questions, please feel free to visit your local authorized MetroPCS dealer.
We appreciate your business and thank you for your continued support of MetroPCS!
Sincerely,
Roger Linquist
CEO and Chairman, MetroPCS
Additional Information and Where to Find It
This letter relates to a proposed transaction between MetroPCS Communications, Inc. ("MetroPCS") and Deutsche Telekom AG ("Deutsche Telekom") that will become the subject of a proxy statement to be filed by MetroPCS with the Securities and Exchange Commission (the "SEC"). This letter is not a substitute for the proxy statement or any other document that MetroPCS may file with the SEC or send to its stockholders in connection with the proposed transaction. Investors and security holders are urged to read the proxy statement and all other relevant documents filed with the SEC or sent to stockholders as they become available because they will contain important information about the proposed transaction. All documents, when filed, will be available free of charge at the SEC's website (www.sec.gov). You may also obtain these documents by contacting MetroPCS' Investor Relations department at 214-570-4641, or via e-mail at [e-mail]. This communication does not constitute a solicitation of any vote or approval.

[bowonwing]

Merger challenges: http://finance.yahoo.com/news/metropcs-board-oks-merger-t-115337776.html

[bowonwing]

Craig Moffett at Sanford Bernstein & Co. said "(A)n optimistic view would value MetroPCS shares at about $18 in the transaction, including the cash."
"Walt Piecyk, an analyst with BTIG LLC in New York, said the merger values MetroPCS at $15 to 16 ... ."
Both from Bloomberg: "Banks May Split $50 Million Advising on T-Mobile-MetroPCS Merger."

http://www.bloomberg.com/news/print/2012-10-03/banks-may-split-50-million-from-t-mobile-metropcs-merger-1-.html

[bowonwing]

Re: the $4.7B debt, yes, but they have $2.35B in cash. PCS management went out and got the cash, like they were going to use it for something, e.g. spectrum acquisitions, they didn't need that much cash just sitting around ... and now crazy "merger."

I can't figure it out, unless its something like Linquist is sick or something and had to get out fast.

[JammingJAY]

I think Linquist owns 7M, 1.7M indirect.

http://www.sec.gov/Archives/edgar/data/1015811/000118143112049029/xslF345X03/rrd354930.xml

But the deal has him removed as CEO one can only wonder at his comp for that.

My gut tells me this is about the 4.7B debt PCS is carrying but I'm just guessing.

http://finance.yahoo.com/q/ks?s=PCS+Key+Statistics

Last week of Sept there was some selling.

Here is a link for form4 filings.

http://www.form4oracle.com/company/metropcs-communications-inc-pcs?id=8755

[bowonwing]

PCS @ $12.24. I know what you mean. The value of this deal for PCS makes me think there is something we don't know about PCS that is not right.

However, hopefully William Power at R.W. Baird is right in stating "that PCS's in being valued at $12.60 to $16 per share." I guess Friday's close will tell us something. Today's price action was horrible.

Only mediating factor is that Linquist holds about 5.3M shares of PCS, he has his fat in the fire here.

[JammingJAY]

That's how I read it. Tells me DT thinks growth here is limited.

This whole deal makes me sad :( I made good bank with PCS buying under $6 and selling over $10 over the years.

I still hold some shares if PCS hits $12 I'm out though.

Good luck to us.

[bowonwing]

Interesting comment by Joel West: "So instead of being paid $39b to exit (failed ATT deal), DT is paying $1.5b cash to build up a more stable company. I would presume that DT hopes that it will be able to gradually unload its 74% holding in the combined company through open market sales." From his 10/3/12 Seeking Alpha article "T-Mobile's Exit Strategy."

So in the long run is DT just finding a way to exit the U.S. wireless market, using PCS as a pawn?

[bowonwing]

T-Mobile's exit strategy: http://seekingalpha.com/article/902501-t-mobile-s-exit-strategy

[bowonwing]

Hard to believe because Linquist still owns about 5.3M shares of PCS. Still, I do not understand "Mr. Markets" reaction to the deal, nor do I understand the deal itself.

PCS has about $6.50 per share in cash alone, so right now at about $12.25 they are valuing PCS at less than $6 a share. As soon as the majority of the network upgrades are done, PCS will be a cash cow, especially if you cut some of the debt expenses.

[JammingJAY]

Wow this "deal" stinks.

A criminal pinky CEO couldn't have come up with a better scam on shareholders.

I fail to see what T-Mobile is giving to the deal. Appears the BOD is just handing the company over to T-Mobile awarding shareholders 4 bucks and a R/S.

No wonder the bottom feeders are tripping over themselves for a class action.

[Dudebud]

Yeah I feel for those that chased it yesterday considering the acquisition leak has been out for months and the post acquisition price is pretty much baked in already. There were lots of "confirmed" reports this morning and now news is coming out claiming it is an unconfirmed possibility. Supposedly DT's board takes a vote on it today.

I have a feeling it will close near support at 12.50 today but there's a lot of flip flopping on this news so it's hard to say with any degree of certainty. Either way I'm just a sideline observer now. GLTA

[bowonwing]

How true! PCS and T-Mobile are both migrating to G4-LTE, there might be some indigestion at the beginning but in end both are headed to the same wireless technology. The Sprint/Nextel technology were two different, non compatible wireless technologies with no chance to migrate together.

Unfortunately I do not understand this deal and apparently neither does "Mr. Market."
$13.57 was yesterdays close, see where we close today.

[Dudebud]

In true form... Buy the rumor, sell the news
I was a buyer of PCS but not sure I'm interested in a DT conglomerate and a reverse split. Can they make two different spectrums work where Sprint/Nextel failed?

[bowonwing]

Well, "Mr. Market" does not like the deal, in a.m. PCS off about -$0.71 to about $12.85:
http://finance.yahoo.com/news/sprint-left-behind-metropcs-joins-142011545.html
Interesting to see were PCS closes today.

[bowonwing]

9/28 T-Mobile sold rights to it's towers for $2.4B, this was last Friday.

PCS has about $2.35B in cash. Together that is $4.75B.

ATT gave T-Mobile about $3B in cash plus another $1B in "assets" for the failed ATT-T-Mobile deal.

PCS has about 364M shares outstanding: 364 x $14.50= $5.02B. The deal by T-Mobile for PCS almost pays for itself.

[bowonwing]

You're right, Sprint should (maybe they still can) have bought PCS, both are CDMA and migrating to G4-LTE. However Sprint has too much debt already. They are finally winding down the Nextel disaster and working on their G4-LTE network.

Maybe Sprint thinks they have enough on the table already. They had a deal in place for PCS and Sprint's B of D waked away from it.

[10452km2]

The reason why I say this is because I would have thought Sprint would have jumped on this instead.

[bowonwing]

Yes, T-Mobile is GSM and PCS is CDMA, but both are migrating to G4-LTE, so eventually the wireless network compatibility problems will be mute.

I am a T-Mobile customer. The complex where I shop has a T-Mobile store which is currently being renovated, which surprised me. Part of the synergy of this deal, if it is finalized, is the combining and reduction of store outlets.

PCS has about $2.2B in cash, or about $6.45 a share. PCS has about 9.3M subs. T-Mobile has been losing subs for about two years. IMO this deal is a no brainer for T-Mobile.

Besides T-Mobile is using the $3b+ ATT paid them to help finance more half the deal.

[10452km2]

This merger makes 0 sense for Tmobile.

[Dudebud]

PCS is just crushing it this year. These rumor moves have been parabolic and just when you think its done... here comes another. Smoke em if you got em!

[bowonwing]

DT in talks to buy PCS: http://www.bloomberg.com/news/2012-10-02/deutsche-telekom-said-to-near-deal-with-metropcs-in-u-s-.html?cmpid=yhoo

[bowonwing]

volte; 1m LTE, churn 1%: http://www.bgr.com/2012/09/21/metropcs-volte-service-4-to-6-months/

[bowonwing]

PCS @ $11.63. As per stockcharts.com agreed that PCS is currently overbought.

Today's price action is strange, 1st hour PCS hit high of day at $12.48 on 1st hour volume of about 3.5M shares, then sold off for the rest of day on about 21M shares traded.

TA Associates started selling again this week 100's of thousand of shares of PCS, looks like they might sell out of PCS as they have less than 300K shares left, see NASDAQ.com PCS insider trades. TA was involved with PCS before public offering.

[Dudebud]

PCS is a beast. 100% in 2 months. Hitting resistance from the march run and looking overbought on the charts.

Capitulation? Or something bigger coming? I have a feeling we will retrace to test high 10s again but I didn't think it would get this far either.

[bowonwing]

PCS @ $9.76. Blew through Q2-12's high of $9.21 on strong volume today.

[bowonwing]

Article on Leap; comments by skibimanex are interesting:
http://seekingalpha.com/article/785591-leap-wireless-a-sale-of-the-company-may-be-on-the-way?source=yahoo

"The investment community instead focuses on operating cash flow, what company calls OIBDA (Operating Income Before Depreciation and Amortization), OIBDA margins, free cash flow, and operating metrics (Performance Metric), that are indicative/predictive of future financial results."

Operating Cash Flow;

OIBDA (Operating Income Before Depreciation and Amortization);

OIBDA margins;

Free Cash Flow and

Operating Metrics (Performance Metric).

This is fundamental analysis.

Compare with technical analysis, (reading the stocks price action on the charts.) See: Murphy, "Technical Analysis of the Financial Markets," and Kahn, "Technical Analysis Plain and Simple."
GL

[bowonwing]

PCS article: http://www.istockanalyst.com/finance/story/5968786/metropcs-pcs-lte-product-launch-could-reignite-subscriber-arpu-growth

[bowonwing]

http://seekingalpha.com/article/752201-metropcs-communications-management-discusses-q2-2012-results-earnings-call-transcript?source=yahoo

[mlkrborn]

Sprint Shares Jump 16%; MetroPCS 27% On Q2 Reports
By REINHARDT KRAUSE, INVESTOR'S BUSINESS DAILY
Posted 10:53 AM ET




Shares of Sprint Nextel (S) jumped 16% in early trading Thursday after the No. 3 wireless services provider reported a wider-than-expected Q2 loss but forecast higher free cash flow after it shuts down its older, Nextel-legacy iDEN cellphone network.

Shares of MetroPCS Communications (PCS) also jumped in early trading on Thursday, up 27%. The wireless firm early Thursday said Q2 earnings minus items rose 78% to 41 cents.

Sprint early Thursday said its results where boosted by sales of nearly 1.5 million iPhones in the quarter, ahead of views.

AT&T (T) on Tuesday said it sold 3.7 million iPhones while Verizon Wireless, owned by Verizon Communications (VZ) and Vodafone (VOD), sold 2.7 million iPhones. Apple (AAPL) is expected to roll out its next iPhone, possibly called the iPhone 5, by October.

Sprint's "iPhone investment is paying off as (customer) churn falls sharply and average revenue per subscriber accelerates," said Macquarie Capital analyst Kevin Smithen in a report.

Sprint has agreed to pay Apple more than $15 billion over several years.

"With nearly 1.5 million iPhones sold, above our 1.3 million estimate, Sprint posted flat sequential iPhone sales and is gaining market share in the profitable iPhone segment," Smithen wrote. "This should bode well for future ARPU expansion and churn reduction. Sprint had 40% of iPhone sales to new subscribers vs. just 22% at AT&T, implying that Sprint's unlimited offerings are paying off in market share gains."

Sprint plans to stick with its unlimited data service plans when Apple introduces the iPhone 5, as IBD reported.

Overland Park, Kan.-based Sprint has seen its shares rise more than 50% since June 1, though it still trades under 4.

Sprint's stock has underperformed for years. But some analysts say that it's now better funded and that its turnaround plan is finally clicking.

"Sprint reported a significant (Q2) margin beat, helped in large part by lower customer volumes, but the company is also doing a great job managing expenses," said Oppenheimer analyst Tim Horan in a report. "It has focused its marketing dollars on converting iDEN subscribers to (the CDMA network). For investors with a long-term focus, Sprint's results suggest that margins can see solid expansion over the next three years."

For the quarter, Sprint lost 46 cents a share compared with a 28 cent loss in the year-ago quarter. Revenue rose 5.8% to $8.8 billion. Analysts polled by Thomson Reuters had expected revenue of $8.73 billion.

[goldbarren58]

old fashioned short squeeze

[bowonwing]

Q2-12 all good except for the 186K loss of subs, which is the first quarter of not adding subs. Only 2% loss, but troubling.

[bowonwing]

Q2-12 results: http://www.marketwatch.com/story/metropcs-reports-second-quarter-2012-results-2012-07-26

[goldbarren58]

whoooooshhhhhhhhh holy cow good start

[goldbarren58]

yey I hope

[bowonwing]

PCS Q2-12; 41 cents per share earnings on $84.3 million, versus 23 cents per share a year ago. Net income was $148.8. Revenue for was up to 6 percent to $1.28 billion.
Finally a good quarter!

[Money Chaser]

I got some PCS at this bargain prices..

I am long on PCS
=)

[Axeblau]

Did you guys know???

PCS's Book Value per share is $8.159

Let's try to be the smart Human Race and see what things are for what they are

[bowonwing]

PCS @ $5.59; hit new all time low today, $5.53. Incredible!