Why Today Could Be Filled With Telecom Rumors

T-Mobile US Inc TMUS, DISH Network Corp DISH and Comcast Corporation CMCSA were three of the biggest buyers in a government auction of wireless spectrum that drew to a close earlier this month. On Thursday, a Federal Communications Commission collusion ban tied to the auction will expire, opening the doors to M&A discussions and rumors in the telecom space.

2.5 hours https://t.co/fOkMm5cwv7

— Walt Piecyk (@WaltBTIG) April 27, 2017
 

What's Going On

Straight Path Communications Inc STRP shares are up 19.6 percent this week after Verizon Communications Inc. VZ out-bid AT&T Inc. T’s $1.25 billion offer with a $1.31 billion buyout offer of its own. The loser of the bidding war may choose to settle for another spectrum play, such as DISH Network or Globalstar, Inc. GSAT.

“We believe that these companies will realize gains on their assets and that the market underestimates the possibility of explosive demand for spectrum,” Height Securities analyst Nils Tracy wrote in March.

Back in February, Sprint Corp S’s controlling shareholder, SoftBank, said the company was anticipating merger talks with T-Mobile upon the conclusion of the spectrum auction.

Traders and analysts have also speculated that T-Mobile could choose to join forces with Comcast or Dish Network as well.

“We continue to prefer T-Mobile as the best fundamental investment in the wireless space because the runway for subscriber growth remains long and shares may benefit further from potential industry consolidation,” JPMorgan said earlier this week.

So far on Friday, the rumor mill has been mostly quiet, and shares of all of the rumored buyers and sellers are down less than 1 percent in early trading.

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