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A group of State Attorney General’s led by New York and California (*collective eye roll from non-coastal elites*) filed a lawsuit yesterday to block the merger of T-Mobile and Sprint. The US Department of Justice is currently reviewing the union of the third and fourth largest wireless carriers.
The two had been courting each other for years prior to striking a deal last April. Despite Verizon and AT&T’s larger market share, the AG’s believe that the coupling will prove detrimental to consumers and will lead to price increases, fewer jobs … and fewer opportunities for The Water Coolest to compare Sprint to Cricket Wireless.
This appears to be the first state-level challenge of its kind without federal backing. It’s also unprecedented that the states would file suit while the federal investigation is ongoing. Stay in your lane, state governments.
News of the state-led complaint sent T-Mobile and Sprint shares down 1.58% and 5.87%, respectively.
I don’t wanna wait
Despite the states’ cute attempt at unity if the DOJ greenlights the “Sprint Mobile” merger the deal will move forward. The tie-up already has the backing of FCC Chairman Ajit Pai and the post-merger company has agreed to invest in 5G infrastructure (because, Huawei) in rural areas and sell off the Boost Mobile business from Sprint.
The question for the USDOJ is whether or not those concessions are enough. The states don’t seem to think so.
Wells, Wells, Wells, look who’s in the news again …
Wells Fargo is entering its third month of a full-time CEO search following the sudden departure of Tim Sloan in late March. C. Allen Parker, WF’s general counsel, manning the fort while the search continues for an external candidate who is prepared to wade into an absolute sh*tstorm.
Several big names from the banking industry were on the firm’s short list, namely Gordon Smith from JPMorgan, William Demchak from PNC, and Richard Davis from USBancorp. While Smith is still being pursued, Demchak and Davis have both turned down the opportunity, because, f*ck that.
I volunteer as tribute!
If only it was that easy. Wells can’t just go offering the job to any Tom, Dick or Harry. The Office of the Comptroller of the Currency (OCC) must approve any person appointed by the bank. In fact, finance chief John Shrewsberry was given strong consideration as a successor, but that was nixed by the Fed and OCC.
In addition to the government, the banks largest shareholder, Berkshire Hathaway, also has a say in the matter. Buffet and Munger both believe the replacement shouldn’t come from Wall Street.
The search continues …
IN OTHER NEWS
- Uncle Sam isn’t the only one playing spoiler. The EU’s antitrust enforcer put the kibash on a planned merger between Tata Steel of India and Thyssenkrupp, presumably because the non-German speaking members of the commission couldn’t figure out how to say Thyssenkrupp. The EU fun police feared the deal would cause serious harm to European customers and consumers.
- Looks like Jeff Bezos’ “did someone order a pizza?” fantasy has run its course. Amazon has given up on its plans to take on Grubhub and Uber Eats via its Amazon Restaurant delivery program. It will shutter the four-year-old program in all 25 US cities where it is available. If you’ve never heard of the “Prime for restaurants,” you’re not alone. As of this writing, only 7 people had used the service. Shares of GrubHub rose on the news.
- Bill Ackman is more indecisive than your girlfriend when it’s her turn to pick a new Netflix show. The United Technologies shareholder sent a nasty-gram (read: email) to UTC’s CEO following the Raytheon merger announcement. Ackman urged CEO Greg Hayes to pull out of the deal as it “makes no strategic sense.” In the past, Billy Hedge Fund pushed the conglomerate to streamline and focus its efforts. “What do you want from me?!” – UTC, probably.
- POTUS is (still) playing hardball in trade negotiations with China. The President followed up comments that the US would increase tariffs if Chinese Preside Xi Jinping did not meet with him at the upcoming G20 summit with remarks that he was holding up the trade deal … on purpose. Trump indicated that unless China agrees to terms set forth earlier this year, no deal will be done. And the vicious cycle continues.
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