Straight Path Communications Inc (NYSEMKT: STRP) stock rose over 0.08% today (as of 9:36AM EDT on June 12th, 2017; Source: Google finance) and continues to trade volatile post their results on Friday (as of June 9th, 2017; Source: Google finance).
For the third quarter of FY 17, the group has reported the total Revenues of $0.2 million unchanged from the prior fiscal quarter and the third quarter fiscal 2016. The company had Loss from Operations of $4.0 million as compared to Loss from Operations of $25.8 million in the prior fiscal quarter and $1.9 million in third quarter 2016. The current quarter’s loss includes $144 thousand of R&D expenses and $1.0 million in non-cash compensation related to the issuance and vesting of equity grants. Overall, the net loss attributable to STRP is of $6.0 million in the third quarter, compared to $25.4 million in the prior fiscal quarter and $1.8 million in third quarter fiscal 2016. The cash and cash equivalents are of $14.6 million as at April 30th, 2017, which is up by $6.8 million from the prior quarter close.
Moreover, Straight Path Communications has signed a binding term sheet to settle claims with IDT that includes a payment of $10 million to the company and the sale of the IP group for $6 million, with STRP stockholders to maintain a 22% interest in the net proceeds of the IP Group’s patent enforcement activities.
Additionally, the wireless carriers are clamoring for spectrum that can fulfill their future 5G needs and the company is enthusiastic about the role the company’s spectrum will play in the 5G ecosystem.
On the other hand, the bidding war between Verizon Communications Inc. and AT&T Inc. for Straight Path Communications has come to an end, leaving the market value of this little-known wireless spectrum owner nearly $2 billion higher than it was about a month ago, when it stood at a mere $450 million. Verizon’s winning bid this week of $184 a share knocked out AT&T, which had originally agreed to pay $95.63 a share back in April. Verizon says its finalized terms work out to an enterprise value of $3.1 billion. Therefore, Verizon will enter into definitive agreement to acquire STRP for $184.00 per share in all stock deal. Further, the transaction is supported by Straight Path Communications majority shareholder, Howard Jonas, who has entered into a voting agreement with Verizon. In addition, Straight Path Communications shareholders are getting a 437 percent premium to the stock’s average closing price for the 20 trading sessions before the bidding began. Takeover premiums this high are uncommon.
Straight Path Communications stock exploded by 481.7% in the last three months (as of 9:36AM EDT on June 12th, 2017; source: Google Finance).