Telecom Stocks are Surging

Shares of AT&T, T-Mobile, Sprint, and DIRECTV are on the rise.

May 1, 2014 at 11:30AM

The Dow Jones Industrial Average (DJINDICES:^DJI) was largely unchanged in late morning trading Thursday. AT&T (NYSE:T) traded in line with its index, while T-Mobile (NASDAQ:TMUS), Sprint (NYSE:S) and DIRECTV (NASDAQ:DTV) surged to the upside.

Markets closed for May Day
While the U.S. markets remained open on Thursday, many other major stock markets were closed in observance of the May 1 holiday. Most European markets were shuttered, including France, Germany, Italy, and Spain. Asian markets such as Hong Kong, China, and South Korea were also closed.

A lighter international day may have spilled over to U.S. stocks, as investors had little international news to react to.

Sprint will submit bid for T-Mobile
Both Sprint and T-Mobile shares were up more than 3% after Bloomberg reported that Sprint would make an acquisition bid for T-Mobile early this summer. The combined company may choose current T-Mobile CEO John Legere to be its chief executive. Legere has successfully turned T-Mobile around since becoming CEO in 2012, with the business adding millions of new subscribers in recent months.

T-Mobile's recent growth, however, may make an acquisition difficult. Regulators blocked AT&T's attempts to purchase T-Mobile, and something similar could happen to Sprint. The U.S. Justice Department is clearly interested in maintaining a competitive wireless industry, and merging Sprint with T-Mobile would reduce the number of major players. Nevertheless, investors are clearly buying up T-Mobile shares in anticipation of a windfall payout in the event of a deal, while Sprint shareholders should also benefit -- the combined company would be far more powerful and able to more effectively compete.


Source: Wikimedia Commons.

AT&T said to consider DIRECTV takeover
The Sprint/T-Mobile entity, if created, could pose a major threat to AT&T -- but AT&T isn't standing still. The Wall Street Journal reported that the wireless giant has approached DIRECTV's management about a possible takeover bid.

DIRECTV, primarily a provider of pay-TV services, wouldn't add much to AT&T's wireless business. However, it might allow AT&T to strengthen its offering to consumers via better bundled services -- pay TV with wireless phone service, for example.

It would also reduce the number of pay-TV providers in the industry. DIRECTV is the second-largest provider of pay TV in the U.S., while AT&T with U-verse is a major player. With those businesses combined, AT&T would be better able to negotiate with content providers, reducing the costs the company would have to pay to carry cable channels like ESPN.

Why AT&T is considering a bid for DIRECTV
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 


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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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