maybe4less

FWIW, CEO dashed water this week on a buyout. He said there was no "exit strategy" and it seemed to be pretty clear that nothing was on the table and they weren't actively pursuing it.

It looks like any company with an East Asian supply chain is going to have it disrupted for probably a couple quarters. Most companies should be able to survive that, but there have to be some that are overlevered, have debt due soon, or some other issue that will make it hard to avoid financial distress. Does anyone have any good short ideas along these lines?

You know the baltic dry index has little to do with STNG, right?

Yes, I think this is right. Apparently they go around and essentially preview earnings to large shareholders and to analysts ahead of time. I've also heard that the Liberty Media guys will make their own comments to people about Global ahead of earnings (which seems totally bizarre IMO). Seems like it skirts the border of being illegal. I've spoken with IR about this before and they put it as they are "reminding" people about certain already disclosed things. Obviously, what they choose to emphasize gets the message across.

I was at the meeting. He addressed it during Q&A. Look at the transcript for the day session. I didn't quite understand it. I've been meaning to go back over it. "Well, I'll take you on my discovery. I essentially increased my exposure on the upside of the discovery by $75 million by buying $75 million worth of discovery stock. The car I put on was a 7-year state planning hedge, right, that only -- that essentially didn't reduce my upside opportunity in discovery, except on a very large up, right? So I mean, for the confusion that doing that transaction represented because I'm an insider, right? I have a great deal of difficulty in accumulating shares in a company because I have to basically say, 2 days, I booked some shares, right? When I've done that historically, when I announced that first purchase, the stock goes up, and then I'm chasing my tail. So what I find is -- better is to go do a transaction with a counterparty, in which they put the collar on, it's a very long-term collar, right, and I then turn around and bought a delta. I use the shares that, that counterparty is selling into the market. In order to hedge their exposure, I buy that delta for cash. So I increase my exposure, but I'm able to do a 1-day transaction, right? Otherwise, if you're an insider and you try and put a collar on, but you get hosed by the counterparty..." Well, I would -- let me follow up on that question. Because if you're looking at me specifically, don't misinterpret. A lot of the transactions that I engage in are estate planning. They're not -- they don't represent a lack of love for the individual asset. They represent kicking a tax event down the road after this step-up in basis, okay? So you've got to be a little careful interpreting. On discovery, I bought stock straight up at -- in the mid-teens after the Scripps deal was announced. I thought it was cheap. I bought it fairly heavily in the low 20s when I thought -- and now I bought a bunch more at $28.03, which was actually the price on the deal. So I'm a believer in that particular -- there are other businesses that I have personally exited because I cease to be a believer, but those are typically businesses in which I have no longer retained a Board or control position. Malone's counterparty sold him a put and bought a call from him. So the counterparty has a synthetic long position. In order to hedge that position, the counterparty has to sell some shares short. Malone wants the shares, so he buys them from the counterparty. Malone is saying this way he can get as many shares as he wants at once without having to buy them in the open market and, importantly, getting them all before he has to file a form 4.

Yeah, I'm out for now. Best Case: we have no real CEO and no real story for six months until after Q1 earnings. Then Andretta comes in and writes stuff down, a bunch of one-time charges, resets long-term guidance, etc. Worst Case: No one noticed how bad Miller was until she was in charge and there are serious problems with the card business she ran for such a lone time.

They also affirmed guidance in that press release. Does that imply that they had already incorporated the recent Fed cut into their guidance?

It also has a ton of mobile revenue, which probably deserves a lower multipole.

They do a lot of vendor financing which pushes off equipment purchases for up to a year. So these vendor debt repayments are really deferred capex payments. Correspondingly, they increase PP&E in the current quarter via a noncash vendor financing transaction. So, for example, they added $2B in property and equipment in the first three quarters of 2019, but $1.3B was vendor financed and they didn't have to spend any cash on. There are some other smaller adjustments, but the net cash number was $900M of cash spent on capex. However, they also spent an additional $3B in cash paying back vendor financing from previous periods. The way management accounts for this is by subtracting the $3B of vendor financing repayments from FCF to provide adjusted FCF. However, if you want to track actual current "spending", you probably want to look at the gross capex number of $2B (instead of the $900M) and not subtract out the debt repayments, since the latter were for equipment added in earlier periods.

Also, don't forget about adverse selection. Zillow is basically offering a discount so you don't to deal with the hassle of traditionally selling your home. Who's the most likely to sign up for that? Maybe someone with a significant problem that doesn't show up in Zillow's model?

Ah, yes, sorry I see the ambiguity now! But, yeah, I think we agree, the bottom line is that fixed-mobile convergence is happening and cable companies are in the superior position vs. telcos due to the preexisting cable fiber network.

If 5G is a great technology that everyone wants with good economics, no need for cable companies to sell service to wireless carriers, they can use their networks to provision their own 5G service. I think you are confusing the telco network which is not actually mostly physical and is mostly broadcasting towers, with an actual physical network of fiber, which is what a 5g small cell operator needs which currently mainly cablecos have. No, that's exactly my point. The cable companies have physical plant currently close to the end users to which it could attach 5G small cells.

If 5G is a great technology that everyone wants with good economics, no need for cable companies to sell service to wireless carriers, they can use their networks to provision their own 5G service.

That's what Sunrise's CEO is saying: that the deal is off. Maybe a bargaining tactic though. Hard to say.

The synergies in PR are very compelling, but I wonder how much we will get a sense for. Cross-selling between wireless/broadband customers and churn reduction might be harder to quantify in the short-term vs. just vanilla cost synergies. I suspect they will give us some guidance soon, probably on the earnings call. In addition to cross-selling/churn reduction, IR pointed out cost synergy buckets of "(i) Network synergies – migrating from AT&T systems and support, (ii) SG&A – consolidation of the two businesses, [and] (iii) Subsea – moving to our network over time."