Bink, some general thoughts on the T situation. It is my experience that a company will often buy a piece of another company through their Business Development operations as part of an overall alliance or partnering deal. These pieces are generally below the clip level for filings. When a company buys a significant piece of a company long term it is better to own the entire business. That is why I believe T insisted on the options for the remaining 10 million shares IDTC has of NTOP so that they can't get held up by HJ. Then all that remains is the float and what AOL and the others have. The major corporate shareholders can be dealt with in many ways. Bought out outright, alliances, partnering, etc. They are used to dealing this way so there should be no paranoia by the corporate partners regarding a T tender. Its all about money and deals so if they fit in there should be no problem. Even if LD is not spun or sold, owning the entire VoIP solution makes sense.
Another observation worth considering is Armstrong's past experiences. He was at IBM when IBM was looking to decentralize. He was number 2 man to John Akers at the time. Gerstner has proven that restructuring is better than decentralizing by selling off segments. Use cash cows (like mainframes, or in T's case LD) to fund operations and allow for a transition to a better model. Spinning off LD as it is does nothing since since the prevailing view is it is a dying business. What you want is a spin that allows for the use of the cash flow and has sizzle since the model includes VoIP with NTOP saving billions per year. Now an analyst can understand how LD survives with its current cash flow and survives in the future with the low cost VoIP infrastructure. This model has value and increases T's asset structure. The more of NTOP you own the more value you have. They can get this by tendering for the float, doing a deal with IDTC or paying them outright, and doing deals with other major shareholders like AOL who has pieces T needs anyway like content. Pieced together you can now see how T can restructure for the future by:
--having a cash cow with LD still providing huge cash flow at high margins during the transition period
--owning all of NTOP eliminating extraneous influences they don't need or want
--having deals with numerous companies providing content for cable, access initiatives, consumer and commercial products and services, and so on.
If you fast forward to end of game, once the above is completed T is the only player now positioned for the future of telephony. Who else has as efficient or pervasive a model? Who else has every space occupied through their own or NTOP deals and is now a partner with many players who otherwise would have shunned T?
--Consumer (AOL, Yahoo, MSFT, etc.)
--Commercial (ADIR, Cisco, etc.)
--Legacy (existing LD, IDTC alliances, BT, Nextel, etc.)
--International (NTOP alliances, 12 unannounced Telecos, PTTs, etc.)
The glue to the above ubiquitous model is NTOP. Just MHO of course, only some observations. |
