Divergent Capital
Private Investor & Writer, Capital-Light Businesses & Special Situations
Rogers Communications' roughly 15% selloff is an opportunity because it does not affect management's push to monetize its trophy sports assets. Those assets are worth about 58-98% of the roughly C$24.5B market cap, with management estimating C$20-25B. The drop followed TD Cowen's downgrade of the telecom business on fears of rising pricing competition. x.com x.comÂ
Rogers Communications' thesis that it will monetize its sports entertainment assets is still in play, even after an 11.57% drop over the past month. The pullback may be a good opportunity to get ahead of the impending transaction, and options could offer cheap, leveraged exposure. A one-page special-situations overview with comparable transactions, valuation and sensitivity analysis is in preparation. x.comÂ
T-Mobile's discount to the Street's lowest target could make it a good trade despite the long-term competition risk. The stock trades 14% below that $169 target, offering a valuation-based counterpoint to the concern that even marginal competition could be disastrous. x.comÂ
Starlink Mobile threatens US carriers' pricing economics even if it takes little market share. AT&T's lack of investment for the future makes its exposure worse. In Peter Adderton's scenario, a $5 monthly price cut on 250 million remaining connections would cost carriers $15 billion a year. x.com x.comÂ
Canadian Natural Resources' long-term track record is hard to argue with, making it more compelling than Rogers. x.comÂ
