Sprint/T-Mobile Merger; Amazon Prime Price Hike; DocuSign IPO
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A MERGER OF EQUALLY …
… atrocious cell service providers. It appears that the third time is the charm for the budding romance between T-Mobile and Sprint: a $26B merger appears to be “done” (read: subject to intense regulatory scrutiny).
The complicated merger sounds a lot like some creepy blood brothers ritual. Softbank which owns 85% of Sprint, will allow Deutsche Telekom which owns 66% of T-Mobile to consolidate the two companies into one really, really mediocre brand. John Legere, T-Mobile’s current CEO is expected to lead the company.
So why now?
Two words: Masayoshi Son. The CEO of SoftBank and the all-knowing fiduciary of the $100B Vision Fund is keenly aware of the rapidly changing mobile provider landscape which includes new players, a competitive 5G market, and new tax laws.
Of course, the deal isn’t without “if’s”, “and’s”, or “but’s.” The US Justice Department does not simply let the third and fourth largest wireless carriers (in a market of four competitors – sorry Cricket Wireless) without kicking the tires.
Water Cooler Talking Point: “This thing is a LONG way from being done. But just, for a second, imagine Slow Cooker Sunday starring John Legere AND Masayoshi Son. That would be must-see TV.”
FRIENDS WITH (MORE EXPENSIVE) BENEFITS
The additional $20/year will help line Jeffrey Commerce’s extremely well-fitting vest pockets … not that the richest man in the world needed the help. Amazon estimates that the increase in Prime pricing will bring in $2B in additional revenue, assuming all 100M members retain their membership.
Fret not supporters of the company that has plans to take over the world one free two-day shipment at a time. The extra $20 will secure some additional perks like free same day delivery, free two-hour delivery on Prime Now products, and Whole Foods delivery in select zip codes.
Water Cooler Talking Point: “I really should break out my Excel sheet to see if this additional cost will fit into my well calculated personal budget. *Rolls eyes.* In reality, I’ll just keep forgetting I pay for it and wonder why my account is suddenly 120 bucks short every June 1st.”
DOCU-SIGNED, SEALED, DELIVERED
Another 2018 tech IPO, another ridiculously impressive trading debut. DocuSign, an e-sig software provider popped 37% on its first day of trading after pricing higher than its target range.
In all the company raised $629M to make digital John Hancocks artificially intelligent. This values the technological equivalent of ‘MS Paint’ at a whopping $6B, more than double its previous private valuation.
A perfect storm of improving financials and playing in the “cloud” space seemed to have ramped up demand for the newly minted shares. Need proof of the power of “the cloud?” Cloud software company Smartsheet also went public on Friday and saw a 30% spike in shares.
Water Cooler Talking Point: “Let me get this straight if you’re an iced tea company and you add ‘blockchain’ to your name, your stock pops? And if you mention ‘the cloud’ anywhere in your roadshow deck your stock pops when you IPO? Allow me to introduce The Water Cloud powered by Blockchain.”
IN OTHER NEWS
- A New York judge temporarily blocked a merger attempt between Xerox and Fujifilm claiming that Xerox’s CEO was just trying to save his job. Can you blame him?
- Toronto’s Stock Exchange was forced to close early Friday afternoon due to technical difficulties but is expected to resume normal trading on Monday.
- Subaru has been manipulating fuel economy data for the past several years. Manipulated Fuel Economy Data: It’s What Makes a Subaru a Subaru.
- Kim Jong Un became the first North Korean leader to step foot in South Korea since the Korean war in the 1950s. He has also vowed to dismantle their nuclear test site. And I thought I had a productive weekend …
- Avengers: Infinity War claimed the largest worldwide ($630M) and domestic ($250M) box office opening weekend of all time. More impressive? Disney now owns 9 of the top 10 biggest openings in North American history.
- US indices were mixed on Friday:
- DOW: -0.05%
- S&P 500: +0.11%
- NASDAQ: +0.02%