Ed’s Daily Notes for August 29th   4 comments

We get the second revision to the 2nd quarter U.S. GDP today at 8:30 am EST. The first guess at it was a 0.7% increase.

Bloomberg: Vodafone in Talks With Verizon Over U.S. Wireless Stake Sale

Vodafone Group Plc is in talks to sell its 45 percent stake in Verizon Wireless to U.S. partner Verizon Communications Inc. in what would be the biggest deal in more than a decade.

The carriers are in advanced discussions about a sale of the holding for about $130 billion, according to people with knowledge of the matter. Verizon is working with several banks to raise $10 billion from each, or enough to finance about $60 billion of the buyout, said two of the people, asking not to be identified because the talks are private.

From Verizon’s perspective, what concerns me is they might be taking on too much debt to get this deal done. Their dividend payout ratio is already 379%. Double or more their debt/equity (which is already 57%), and that dividend is in danger.

For anyone who is holding Verizon (VZ) for the long-term, you can probably maintain your position, but expect a bumpy road for the next year. For anyone looking to buy it, I would wait a quarter at least, and maybe 2 or 3 quarters. You will get a much better price later.

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Posted August 29, 2013 by edmcgon in Economy, News, Stocks

4 responses to “Ed’s Daily Notes for August 29th

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  1. Clearly vod was the security to own. Funny, I have never really looked at them.

  2. Actually I see vz is up as well in trading during breakfast. Well done for any that own it. Win-win.

  3. Is this mean that VZ is not coming to Canada? Yeah for me since I own TELUS.

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