How Did Verizon Finally Pull Off the Vodafone Deal?

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Sept. 3 (Bloomberg) –- Aegis Chief Investment Officer Stanley Crouch and Cappelo Capital Managing Director Gene Urcan discuss Verizon’s purchase of Vodafone’s 45% wireless stake and whether it is a good deal for Verizon shareholders. They speak with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Benefits for both sides of the deal.

Gene urcan advises on various areas, including mergers with acquisitions.

I want to begin by putting into you this is a deal that has been in the works for years.

How did verizon finally do it?

Was a matter of spending a lot of money?

I think so.

This deal, i do not think it comes to a surprise to many in the marketplace.

However, obviously, management and the shareholders should be extremely excited at the 130 billion dollar prize.

Many thought it was going to come off at $105 billion.

$130 billion.

They're going to get that bridge loan to pull this off.

Does that pull money out of the market that would have been spent on other deals?

You are getting this him in a -- m&a cycle started.

--they have the money to deploy.

There will over cap allies in that sense.

They have to hold more capital on their balance sheets.

They are lending -- they are very leery about lending.

I think it is more than that.

You touch on that important point.

It is still going on and is not finite yet.

The banks have the capital.

Where they choose to deploy it, as opposed to making looser consumer loans available.

Is this good for verizon shareholders?

I think it is a good deal for verizon.

First, they are getting a great asset.

Unlike microsoft purchasing nokia, a struggling mobilephone maker.

Verizon is getting a great asset.

100 million loyal customers.

The integration is going to be pretty seamless.

On the dividend side, the shareholders should be extremely happy.

They pay 18 $5 billion in dividends.

The shareholder should be happy about that.

The big question is going to be whether owning 55% or 100% makes a big difference.

In my opinion, it does.

He brings more agility to verizon.

It allows them to move seamlessly.

It allows verizon wireless stores to sell other verizon products and services, such as verizon files -- fios.

That is right.

Will they compete more effectively against at&t and sprint?

I think they are going to certainly tried.

At&t is a big player.

The other players are smaller.

Verizon sees this as trying to compete with the large at&t. they can capitalize on a lot of different things.

I have the cloud systems.

By bringing all this together, it allows them to expand and grow in areas beyond mobile.

What about investing in stocks like verizon?

Paying the dividend?

Investors have to think long- term, obviously.

If you compound your cash flow and reinvestment, that is the secret of building well then that would ease.

You do not think of it as an income model/ . half the historical returns, where the compounding effect is the dividend, you can withstand a fall in prices.

You are buying cheaper shares with that cash flow.

You are getting more shares for the same dividend.

I knew you were going to give us the glass half-empty scenario.

Stick around.

More coming up.

I will talk to the creator of the mochibags.

How this executive used kick starter to have his idea take off.

If you ever use a drawstring backpack him a you know it can be a mess.

My next guest has a solution.

He has created something called the mochibag.

It has been a big hit on kick starter.

He joins me from chicago.

Welcome to bloomberg.

Explain to people who may not be familiar, what is a mochi bag, and what is kick starter?

It is a reinvented drawstring backpack.

It is the world's first premium a ball -- premium drawstring bag.

It features to patented designs.

Kick starter is a crowd funding site.

We used it to raise our funds.

How much were you looking to raise when you got started?

We were looking for about $10,000. our initial goal was $10,000. we raised $146,000 over 39 days.

Stanley crouch, this is what is known as being in oversubscribed deal?

Any investment banker would take that ratio.

A little bit more on what is the next step, nab you have raise the money.

What happens?

Can people buy these bags?

We have opened our website for those who are still interested in purchasing these.

We are taking pre-orders.

Our next up is to focus on building our brand.

Of course, with any start up, we are looking for capital and exposure.

We are actively seeking partners to partner with, to take us to the next step.

What about the people that do native -- that donated the money online.

It is viewed as a donation, correct?

It is a donation, but in return we are going to fulfill them with our bags.

We have several types and styles.

The backers will choose which one they would like to get.

They will get a bag for their donation.

Did your parents ever think when he went to school that he would be making bags and raising money online?


not at all.

This is a surprise for them.

I want to thank you very much.

The creator of the mochibag.

Is this the new way investors are going to work in the future question the absolutely.

That is coming.

I think the rules are being loosened to allow investors to go into these are the deals.

Thank you very much.

Thank you for "taking stock." . .

This text has been automatically generated. It may not be 100% accurate.


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