Market Morning: Sprint Deathbed Defense, Macau Slowdown, Berkshire Buys Oil, Guaido Coup Flops

Stock Market Roundup

Sprint, T-Mobile Deal Should Go Through Because Sprint is Dying

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So say Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS), in the so-called “dying company defense”. Fox Business is calling this an “exclusive”, but if you just look at Sprint’s balance sheet and debt repayment schedule, it’s pretty obvious what’s going on. Sprint is levered about 150% with billions due in the near future and hasn’t grown in years. Interest expense is eating into almost all of its EBITDA and the treadmill just keeps going faster. T-Mobile on the other hand is doing well, with the same amount of debt absolutely, but the company is much bigger so it can handle it, for now. Combine the two though and it’ll have about $70 billion in total debt, which could be dangerous even for the combined company. Meanwhile, the people at the antitrust division in the Justice Department are trying to figure out if the merger will harm consumers, because they’re supposed to know this stuff, somehow.

SEE: Cannabis Stock News Daily Roundup April 30

Major Slowdown in Macau

Gross gambling revenue in Macau, China’s gaming mecca, fell 8.3% in April for the biggest year-over-year drop since June 2016. The VIP gambler volumes are slowing to a trickle and it might be due to a general slowdown in China. April revenue came in at $2.92 billion, down from $3.2 billion in March. The decline was still in line with analyst expectations. Meanwhile, Macau giant Wynn (NASDAQ:WYNN) was just fined $35 million for failing to disclose a single complaint against its founder and former CEO Steve Wynn, who allegedly pressured manicurists and cocktail waitresses into having sex with him over the years. Wynn claims it was all consensual. The Massachusetts Gaming Commission claims it wants money. Wynn Resorts, after paying the fine, can now open its $2.6B resort in Boston, renamed Encore Boston Harbor after the Wynn debacle. Steve Wynn has yet to change his name to Encore just to annoy his former employees.

Buffett’s Berkshire Goes Long Oil, Really Long

Berkshire Hathaway (NYSE:BRKA) is sinking $10 billion into Occidental Petroleum (NYSE:OXY), for an investment constituting about a fourth of its entire market cap of $44 billion. The investment is contingent on Occidental winning the bidding war for Anadarko Petroleum (NYSE:APC), which Occidental is bidding for against competing offers from Chevron (NYSE:CVX). Part of the deal is for Berkshire to receive warrants to purchase 80 million shares of Occidental at $62.50, still higher than the current share price of $59, but not by much. Plus Berkshire would get all the dividends, currently $3.12 a share. At 80 million shares, that’s about $250 million a year, which would pay for the entire investment in about 40 years. By then Buffett would be 128 years old. We wish him good health and long life. Due to the potential dilution in the deal for existing shareholders, the stock dropped 2% on the news.

Guaido Coup Flops in Venezuela

It’s another Cold War repeat of two giants trying to prop up different sides of a smoking wreck and declare victory over the pile of rubble. Venezuela is caught between the United States on one side and China/Russia on the other side, both of which for some reason have a vested interest in who ends up on top of the smoldering ruins of Caracas. So far, Russia and China seem to be winning because the US’s man, Juan Guaido, who declared himself President, has failed to bring out the masses and dislodge the bus driver Nicolas Maduro from power. Power over what it’s hard to say. Guaido has tried to take control of the military, but since they are still being fed by Maduro somehow, they’d prefer to keep eating food rather than risk starving backing the wrong guy. Meanwhile, the people of Venezuela are tired of picking sides and just want to get out of there, so they’re going to Columbia while the sides keep arguing over who gets to control whatever is left of the country.

Pfizer, Sanofi Sleeping Pills Slapped with Strict FDA Warnings Due to 66 Deaths

“Don’t take sleeping pills while operating heavy machinery,” is being tweaked to “Really, don’t take sleeping pills while operating heavy machinery, really,” or something along those lines in a boxed warning, the strongest type of warning the FDA can warn about, in a bid by the FDA to really discourage people from doing this. 66 deaths have been linked to the sleeping pills since they came to market. The added emphasis in the warning labels being slapped on Pfizer (NYSE:PFE) and Sanofi (NYSE:SNY) sleeping pills Sonata and Ambien will hopefully stop people from taking the pills if they start experiencing odd sleep behavior. In addition to 66 deaths, there were 46 reports of serious injuries including overdoses, burns, loss of limbs from extreme cold, and self-injuries from gunshot wounds. Apparently while sleeping. Homicidal sleepwalking is actually a fairly common theme in movies.

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