1/ CRAZY SPECULATION
If current tech boom busts—
—the straw that broke its back may be traced back to 2 things: legistlature + leverage.
LEGISLATURE: 10 Attorneys Generals (including Letitia James (NY) + Xavier Becerra (CA) oppose Sprint TMobile merger
2/ LEVERAGE: Softbank owns 84% of Sprint which makes up 30% of its total liabilities. Post merger it would own 27% of combined co’s.
And this is the 3rd attempt in 5 years to do the deal. If it fell thru, Softbank is stuck with no-growth Sprint + ton of debt....
3/ That debt + rumors of at worst troubles + at best more modest ambitions of raising Vision Fund 2—would eliminate a key marginal price setter + referencable comp underlying many (ridiculous) valuations.
You can follow @wolfejosh.
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