This was another quiet week for both the Fab Five and the Telco Top Five. The next equity value catalyst will be third quarter earnings. Here is the current schedule (as of October 12):
By the next Interim Brief, we should have a good idea of how wireless and traditional telco firms are faring. As we summarized in last week’s Brief, our biggest concern is Verizon’s prepaid performance, while our biggest upside is AT&T’s broadband performance. We did not discuss this last week, but think that AT&T’s fixed wireless product (Internet Air) could separately surprise.
The biggest story of last week was the 32-page submission from the Department of Justice outlining possible remedies for Google in their antitrust case (see Bloomberg article here – actual brief can be accessed through the hyperlink to the word “said”). There are a host of remedies being recommended by the Department of Justice, and, like we indicated in our Brief called “When History Rhymes” (here), some of the impact could spill over into Samsung and Apple.
Despite the headlines from many major news outlets, the overall tenor of the filing is not “Let’s break up Google.” In fact, the DOJ appears to be looking to minimize the number of remedies. However, the net effect of the filing might be to entice Google to agree to spin out a unit of the company. We think that the likelihood of this proactivity is remote but not zero, and we aren’t sure that anything the Mountain View giant would propose would be entertained.
April 2025 is the date set for the 2-week remedies hearing with Judge Amit Mehta targeting a final ruling by August. We think the impact of this is far reaching to the entire ecosystem, and that payments from Google to carriers and OEMs will likely be sharply curtailed.
File is below. Full Brief with more 3Q earnings preview insights next Sunday. Also, we will have an iPhone availability update out tomorrow late afternoon. Go Chiefs!
