Stocks: (T)(VZ)(DT)(BT)(BLS)Deutsche Telekom fired its CEO. The company’s stock has not performed well, but that is only part of the story.The German government owns 33% of DT’s shares, but recently private equity group Blackstone has taken a 4.5% stack. Private equity guys are the smartest people in the room, and they don’t like their reputations hurt by losing money.Deutsche Telekom owns T-Mobile, which has a foothold in the US but is behind Cingular, Verizon, and Sprint in wireless customers.DT also has a big fixed-line business which is falling off like it had been for US telecoms like AT&T. The company also has T-Online which offers VoIP and broadband service.Deutsche Telelom has a market cap of about $75 billion.DT is an international company. According to Morningstar it gets 45% of its revenue from outside its home market and most of that comes from the US.One of the reasons that DT’s CEO was fired is that he has not been quick enough to cut costs. That implies that there is a lot more to be cut. If so, there is a reasonable chance margins could be improved.DT has had a great deal of success cutting debt, as the WSJ has pointed out.There is probably a good chance that Blackstone would like to see some profit out of its investment, and the German government might even go along.There are not a lot of potential buyers. British Telecom? AT&T? Verizon?AT&T has a market cap of $130 billion. The company has already bought BellSouth. It has huge wireless operations in the US, Cingular. These could be combined with T-Mobile.How far-fetched? Ask Blackstone.Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Deutsche Telekom For Sale? AT&T Or Verizon?
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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