Look Before You Leap

 | Jul 15, 2013 | 2:56 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:










Wait a second! Wasn't Leap Wireless (LEAP) left for dead? How did four analysts have sells on the darned thing? How did that happen?

Now you have one of the shrewdest, most well-capitalized companies in the business, AT&T (T), paying double for what it sold for Friday morning, and it might not even be able to obtain the company, given that it is trading well above where the bid stands?

Turns out that the Leap spectrum, what you need to expand your business is much more worthwhile than even the bulls thought. It's a hugely strategic asset and one that could entice T-Mobile (TMUS) and even Sprint Nextel (S)-Softbank to enter the fray.

How come analysts were so wrong? Because time and again, they look at EPS estimates and do not look at enterprise value or strategic value. We have a spectrum shortage, and AT&T, Sprint and T-Mobile all need more of it. The only other big clump of spectrum out there for the grabbing is with Dish Network (DISH), the company run by Charlie Ergen, the hard-charging, swashbuckling manager who tried to break up the Clearwire-Sprint deal because he wanted to augment his spectrum.

Turns out that this left-for-dead company wasn't left-for-dead at all. It just wasn't valued properly. And the valuation isn't set by the analysts; it's set by the acquirers. They were too bearish, and they kept you out of a good one. 

Columnist Conversations

we will add this here to cheaply protect our downside a bit BOUGHT SPY SEP 244 PUT AT 2.70 ...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.