With our dividend payments now claiming most our free cash flow, rather than paying down our debt; interest rates / borrowing cost rising and I am assuming a huge purchase during 115 are we going to go down the path of WorldCom or Lehman? We are in a debt straitjacket, and neither Dan nor AI are the financial Houdinis that can save this company. The barbarians are at the gate (Elon) and AST SpaceMobile is heaving spitballs.
God help us!
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It won't be much worse given that Space-X has the cash on hand to outbid them for all of the spectrum.
That is unless, the FCC institutes a spectrum cap that leaves the legacy three trying to outbid each other for the scraps.
The situation indeed looks like a financial death trap:
- enormous debt and rising costs of servicing it, little effort to decrease the debt meaningfully. There was a chance to do it after the layoffs.
- very high dividend which tries to avoid the big funds and shareholders selling or decreasing their stakes which would drive the price further down
- billions going into stock buybacks attacking the price action from another angle
- what's left goes into dubious AI expenditures but Verizon is just a customer and sorts of a slave of big tech. Verizon doesn't develop or train their models, so the gained institutional knowledge is rather small and ages quickly.
- Verizon still needs to invest a lot into maintaining and developing their infrastructure but the CapEx was cut
All the financial engineering is very short sighted and leaves the company in a fragile situation. That's the reason you don't let (ex-)consultants lead a company - they lack strategic thinking and sense of ownership. They think episodically and transactionally.
Elon does not have fixed wireless access. Bo-m, roasted.
No way! Vz is a great company and the future is bright!