Ed, Night Writer, ALL, My take (mVho) on this big rise today is that it was pure speculation. Specifically, a hedge in case the biggie telcoms registered for the auction... nobody wanted to be left behind and God knows how long it will take for the FCC to publish a list of those who signed up ... so why not throw down a couple of pachinkas in case the stock takes off and never looks back. What could happen though is that the biggies DIDN'T weigh in. In that case, I think the stock will tumble over the next few days.
If this happens, I will be buying. (haven't added to my position since I first bought a year ago). My rationale is counter intuitive but simple. I am confident that the big telcoms realize that this tech is the quickest, cheapest, easiest, way to local (last mile) service for the long distance carriers without having to negotiate with the locals and the locals realize that it would save them big bucks on build out to get to long distance without giving up local turf through negotiation with the long distance cariers... and, perhaps more importantly than turf wars, both realize that there is more to telephony than voice. (That was a big deal 70 years ago but no more.) The near future demands other products as consumers have greater requirements.... Therefore.. the punch line... if the biggies and the RBOCs did not sign up, I believe they are waiting to buy up the winners.
Q. CAP.... you idiot.... why would they do that? Why not just jump in... bid and win?
A. What if they did? Such interest (can't do it in a vacuum) would have certainly raised the interest (then the stampede would have started) and bids for each of the markets would have to be much higher to win.... they would be bidding against themselves! Why not pooh pooh the whole thing... nah, we're really not interested.... yawn.. let the bids go cheap (maybe even at the minimum set by the FCC) and then step in and buy out the winners in their targeted markets? The bid winners get to make a significant profit.. for next to nothing.. and the big players get to own the rights through the winners - which gets them around that pesky Telecom Act/keeps them from negotiating away turf to their adversaries - and gets them into the future of telephony for less than it would have cost them in an all out bidding war against peer competitors.
If the big guys signed up, the stock will shoot up. Will be interested to see who signed up. (If anyone finds such a list please post!) But I say again, I think today was based on pure speculation that they would. If they did, the speculators and we win one... if they didn't, there will be a buying opportunity before the auction as the speculators will be disillusioned and sell off as quickly as they bought. After the auction, I am confident that the biggies will weigh in... they can't be left standing on the pier when the ship to tommorrow sets sail! Bottom line: It's a win-win. CAP |
