Bob, I agree with your recent assessment on LTBG, and would add one more intangible positive. Their new President, from IBM, presumably did some due diligence of her own before giving up the benefits of a senior job at a big company for a small one, including an option package probably based on the price when she started 4/08, which was around $11.50.
Another plus is that I believe shortly your phone number will be portable between carriers, like on regular long distance service. This will tend to increase churn since you will be able to keep your number but get rid of a carrier you do not like. A long term minus is that plans with zillions of minutes tend to reduce churn, since you do not need to switch for a better deal.
I do not yet own the stock, but may in October. A number of months ago I sold equal amounts of uncovered puts at $10 and $7.50 strike prices, when the stock was around the lows of $10 at the time. With this strategy, I will own stock at an average cost in the low $7's, if is under $10 in October.
This is not risk free. However, in the low $7's I am paying very little for the business. I think LTBG is about the best way to have exposure to this industry, if you want any. I did not want any of the carriers because of debt and because I am certain that the industry must consolidate, and did not want to take any acquisition risk. |
