FCC Revisits Public Safety Network
Motorola should buy it
Yep, with all their problems, they should still do this.
Maybe I'm wrong, but here are my reasons:
1) Since it's hard to sell, they can bet a low ball price on the spectrum. Maybe $1 Billion? They have $20 billion in current assets and their balance sheet is $15 billion net positive (assets-liabilities) or $8.5 B current assets - current liabilities.
2) They are already the leader in the US for 2-way radio communications and one of if not the largest provider to public safety right now
3) They've already built the Nextel network, so they can do something similar to provide integrated 2 way and cellular communications.
4) The public safety market is huge, imagine everybody having to convert to have a true nation-wide intero...
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Maybe I'm wrong, but here are my reasons:
1) Since it's hard to sell, they can bet a low ball price on the spectrum. Maybe $1 Billion? They have $20 billion in current assets and their balance sheet is $15 billion net positive (assets-liabilities) or $8.5 B current assets - current liabilities.
2) They are already the leader in the US for 2-way radio communications and one of if not the largest provider to public safety right now
3) They've already built the Nextel network, so they can do something similar to provide integrated 2 way and cellular communications.
4) The public safety market is huge, imagine everybody having to convert to have a true nation-wide intero...
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Makes sense but it is not that easy given their issues. Their debt was just downgraded and their outlook is negative those two alone will not allow for a purchase of Nextel or even new spectrum. Shareholders would not allow anything until they can actually turn their business around. Oh and Nextel is not going away.
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They don't have to consult shareholders to make a purchase though. Sure the board could get ousted if it's a bad move, but this seems to make sense. I'm not talking about buy Nextel. That would be foolish at this point. I'm talking about the 700 mhz public safety spectrum. They would not need to issue new debt to finance it because I think the minimum price for the spectrum was about $1.3 Billion and the FCC couldn't get anyone to bite so they can probably get it for $1B. Moto has far more than $1 Billion cash on hand.
Yes it's a risk and yes they are struggling right now, but they need to make some big moves to get out of the mess they're in right now.
Yes it's a risk and yes they are struggling right now, but they need to make some big moves to get out of the mess they're in right now.
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Of course they do. They are under scrutiny and Icahn and other shareholders are very mad at them for their continued failures. They might need to issue more debt, although they do have $7.7B in cash with $4.2B in debt, but they used $900m because of their negative cash flow, capex, inventory issues, and others. So that might continue and soon they might have to borrow. Two qts in a row they have been doing very badly; 1st qt and fourth qt. it should continue. They need to fix their business before they even think of doing anything else. They also need to have a very good plan and a high ROE and ROIC before they even think of buying spectrum or else shareholders would be all over them as they are now. One mistake leads to failure. Check out Y...
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