For those of you looking for a recap of the situation with FRO/GBLX, here it is:
1. FRO/GBLX merger. If you are a FRO shareholder, you will get 2.05 shares of GBLX for each share of FRO. There are no " price collars" (restrictions on how high or low GBLX stock can go before the deal is done). FRO CAN NOT back out of the deal. They gave up this right when the deal was "sweetened" from 1.78 to 2.05 shares of GBLX.
2. The gap you are seeing between 2.05 * GBLX stock price and FRO stock price is large because there is a risk that the deal will not close AND because there is not enough GBLX stock in the float for all arbitrage players to get in on this deal. If there was more stock in the GBLX float, you would see FRO within 5% of 2.05 * FRO.
3. As we get closer to the shareholder vote (23 Sep) and the closure of the deal (estimated 30 Sep), we will see FRO stock go up relative to GBLX stock. This represents the reduced risk of the deal not going through. After 23 September, we will have at most a 2% gap between 2.05 * GBLX and FRO.
4. The "NASDAQ 100" and "S&P 500" issues are RED HERRINGS (not important; distractors). Neither one will move GBLX stock more than 1-2%, and only for a day. The far more important issue is the ending of the quiet period after the deal closes. It is then that you will see all parties free to discuss the impact of the merger and the Microsoft/Softbank deal. There are MANY analysts who are very bullish but not allowed to voice their opinions now. ONe analyst who is not associated with the deal has a $76.50 price target on GBLX and is revising his estimates UPWARD, based on the Microsoft deal.
5. Bottom line for all individuals is to load up on Frontier stock right now, when the gap is the largest. The shares you buy for $42 right now are going to be worth at least $50-60 as soon as this deal closes. Then you will have GBLX shares, which have serious potential to go to $100 in 6-months, $300 within 2 years. Do not fool around, waiting for a better deal to come by. Those who invest in GBLX are getting in on the ground floor of the only game in town for a stock that will be the one true WORLDWIDE phone/data/internet enabler from 2001 on. There is a real strong possibility that AT&T will abandon it's efforts to duplicate what GBLX is doing, especially if capital tightens in the next year or two. The barriers to entry are astronomical in this kind of endeavor, and the partners are Microsoft and Softbank....very deep pockets and saavy investors themselves.
This deal is one which has the potential to make you a million dollars in 3-5 years if you have $10,000 to put into Frontier TODAY. Winnick is your CEO and he is a winner. Go with him and have a little faith. |
