The Phaserl


LEAP Leaps

by Pater Tenebrarum,

Paulson Gets One Right

As CNBC reports, John Paulson evidently has a much hotter hand picking telecom stocks than gold stocks. Appropriate to the situation, the headline reads: “John Paulson’s telecom picks take an even bigger Leap”.

AT&T has decided to take over Leap Wireless, causing a badly needed swelling of the bankroll at Paulson & Co., and lots of wordplay elsewhere.

“So far this year, Paulson has won big on the mobile carrier SoftBank Corp.’s $21.6 billion controlling investment in Sprint Nextel, a deal in which he lobbied successfully for a higher price and a bigger cash component. He’s improved his returns from Metro PCS’s sale to the T-Mobile unit of Deutsche Telekom by demanding better terms and less debt. And in the wake of news late Friday that AT&T planned to take over Leap Wireless in a $1.2 billion cash deal—valuing the prepaid wireless provider at 88 percent above its share price at that time—Paulson appears primed to make even more from his telecom holdings.

Paulson is Leap’s third largest shareholder, with 7.8 million shares, according to recent filings, or about 10 percent of the shares outstanding. It’s early yet in the Leap deal and shareholders and government officials must still approve the deal in order for it to be completed. Unsurprisingly, though, Paulson appears set to back it.”

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