Everyone,
As I understand it, once this deal is done the USW shareholders will be able to convert to 1.2 shares of "G" stock, if they choose. In the meantime, the USW shares have a dividend of almost 4% (money market rates) that should continue to support the price of USW shares. The only wildcard is they haven't said what the dividend will be on the future "L" shares, but I presume it will be something commensurate with the existing USW dividend (bad assumption?).
Based on this, the USW stock should have good support around where it is now, as long as the dividend remains, which it should. This suggests that the GBLX stock should have bottomed about where it is now, due to it's tie in to the USW deal.
On the other hand, the upside is limited for the short term until the deal is done and everyone picks which side of the boat they want to sit on.
In the significant event that this deal falls apart, GBLX will pop big time.
Over the long term, I think it will become clear that broadband providers need the local loop as a feed into their networks. Think about it. If most internet users are pumping into the backbone at 256K or higher, that becomes significant.
Short term, I think this stock is dead money, but little downside risk. Longer term, I think it has great potential.
Any thoughts are appreciated.
Still long (but stressed).
Regards,
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