Apple's New iPad vs. Microsoft's Surface 2 | Tech Teardown - 10/21/13 | The Motley Fool | Summary and Q&A

TL;DR

AT&T is selling 600 towers to Crown Castle and leasing an additional 9,100 towers, resulting in a win-win situation for both companies.

Key Insights

• 🗼 The tower transaction between AT&T and Crown Castle is a strategic move for both companies, with AT&T raising cash and Crown Castle expanding its tower portfolio.
• 😘 Crown Castle's decision to become a REIT will provide tax advantages and lower their weighted average cost of capital.
• 😑 The market reaction to the tower transaction has been mixed, with AT&T investors embracing the news and Crown Castle investors expressing skepticism.
• 👶 The analyst upgrade for Apple indicates renewed optimism in the company's performance, especially regarding the new iPhones.
• 🎨 Microsoft's Surface 2 is expected to do better than its predecessor due to improvements in design and functionality.
• 🫥 Nokia's Lumia branded tablet could impact Microsoft's Surface line if it performs well in the market.
• ✋ The anticipation for Apple's iPad event is high, with expectations for new iPads and the possibility of a fingerprint sensor.
• 😘 Chromebooks, with new manufacturers joining in like LG, are gaining traction in the low-end market and educational institutions.

Transcript

Aaron Kennedy here today with Evan new for Tech tear down here are headlines for Monday October 21st over the weekend AT&T announced a nearly 5 billion Tower transaction with crown castle what's going on with this deal so crown castle is going to be buying about 600 Towers from AT&T and also leasing another 9100 uh and you know for that considerati... Read More

Questions & Answers

Q: Why is AT&T selling their towers to Crown Castle?

AT&T is selling their towers to Crown Castle to raise cash for expansion plans and the acquisition of Leap Wireless. This deal also allows AT&T to focus on their core business of providing wireless services.

Q: What are the benefits of this tower transaction for Crown Castle?

Crown Castle will gain tax advantages by becoming a Real Estate Investment Trust (REIT), which will lower their weighted average cost of capital. Additionally, this acquisition allows them to expand their tower portfolio and generate more revenue.

Q: How are investors reacting to this news?

AT&T investors have embraced the news and the company's shares are up. However, Crown Castle investors have shown some skepticism, causing the stock to suffer. The reaction is mixed due to Crown Castle's earnings report, secondary offering, and increased weighted average cost of capital.

Q: What does the analyst upgrade for Apple mean for investors?

The analyst upgrade from hold to buy for Apple shares indicates positive momentum for the company. The upgraded price target and positive data points about the new iPhones suggest that Apple could exceed expectations this quarter, which is good news for investors.

Summary & Key Takeaways

• AT&T is selling 600 towers to Crown Castle and leasing an additional 9,100 towers in a transaction worth nearly $5 billion.

• Crown Castle's acquisition of these towers will provide tax advantages and lower their weighted average cost of capital.

• AT&T will receive $485 billion upfront in cash, which will help finance their expansion plans and the acquisition of Leap Wireless.