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1. entertainment group will generate profit but remain a poor investment return after COVID
2. wireless losing share on 5G to TMobile so long-term cash flows expected to decline continuously
3. Other areas may have growth but not enough to offset cash flow generation declines in 2 main businesses:  security, business networking services, FirstNet
4. dividend growth may remain relatively flat.  IF cash flows fail greatly, expect future cut down the road if buybacks don't solve problem
5. significant risk for PE compression to levels similar to Verizon leading to greater capital losses

Why might private companies choose a SPAC over an IPO?

https://www.fidelity.com/learning-center/trading-investing/SPACs?ccsource=email_weekly_AT

Due in part to the SPAC voting rule change, and other market forces, SPACs have become an increasingly popular alternative to IPOs. According to a recent Investor Bulletin from the SEC on SPACs, "Certain market participants believe that, through a SPAC transaction, a private company can become a publicly traded company with more certainty as to pricing and control over deal terms as compared to traditional IPOs."

More specifically, some of the reasons a private company might choose to go public via a SPAC versus an IPO include:

• Circumventing the IPO process. An IPO can be time intensive and carry significant costs. A SPAC is already public and, consequently, it can allow a company to quickly access public markets.
• Flexibility of SPACs. Instead of raising funds through an IPO as a private company, a SPAC can be an alternative for those companies that are highly leveraged (i.e., the company has a relatively significant amount of debt as a percentage of its total financing). A highly leveraged company may have difficulty raising funds in an IPO.
• Private company shareholder benefits. Founders and other major shareholders who want to sell some of their ownership position upon going public can sell a higher percentage in a reverse merger than they might be able to with an initial public offering. Also, these founders and shareholders can avoid lock-up periods (a predetermined amount of time that a shareholder cannot sell their shares) that can be associated with an IPO.

An important distinction to note here is the different valuation approaches with SPACs and IPOs. According to the SEC, "Unlike the traditional IPO process, where a private operating company sells its securities in a manner in which the company and its offered securities are valued through market-based price discovery, [SPAC managers] are solely responsible for deciding how to value the private operating company and how much the SPAC will pay for it."

Potential Value Opportunities

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