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FitBit potential & CTL explanation +3
00:34 20-Aug-17
There are reports
that FitBit's upcoming smart watch will use red and possibly
infrared PPG sensors. I alluded to the improving state of
wearable health care sensors in my coverage
of the company's last report and this, combined with error
correction, could be a big step forward. The point is that
the new sensors should enable not just more accurate heart rate
tracking, but collection of new types of data like oxygen,
hydration and even glucose levels. Data like this would be quite
valuable to many of FitBit's partners, not to mention its
customers, who have reported occasional instances of even the more
rudimentary device data being
used to make life-saving
diagnoses. I've said from the beginning that the watch needs to
be a life-saving product for the company as well. This sounds
like a step in the right direction.
---
Here is the most cogent explanation
I've seen for what really kicked off last week's CTL market
movement.
The moves for the week line up pretty well with the media mangling of a pretty simple and expected event: a publication from the CUPC (California Public Utilities Commission) at the beginning of the week, which sets a 60 day limit for final decision. A blogger interpreted this as meaning there is "virtually no chance that the CPUC will approve the deal before the end of September", and then Barron's echoed that speculation on Thursday, dropping all of the relevant detail in the process. The only thing Barron's eventually did to mitigate such bad reporting was to update with a quote from CenturyLink:
We are aware of the procedural timeline laid out in the California order. The California procedural rules allow a decision to be rendered earlier than the 60-day standard timeframe. We continue to work constructively with the California Public Utilities Commission and other regulatory agencies to secure approval for our combination with Level 3 and continue to target closing the transaction by the end of the third quarter 2017.Here's my take on the actual facts. The CPUC will review the merger, and we always knew that California would be one of the final hurdles. Despite consistent statements like the one above, I've never relied on this deal closing by any specific time before the end of this year. A delay of a month or so may rial the market, but it doesn't change the long-term business fundamentals. I find analysis that claims otherwise right before CenturyLink should announce its next dividend (which now represents over 11% yield) highly suspect.
Again, all I care about is that the merger does go through and
that the dividend is maintained. I've acknowledged
that I could be wrong on the second point and provided reasoning
on why I think it's a good risk to take. I think that reasoning
holds more true than ever in the wake of pricing which, again, was
mostly likely the result of stop-limit orders and algorithmic
trades, rather than fundamental analysis or a true change in
outlook. In that way, this situation strikes me as similar to
when the InvenSense
deal also went through the media
meat grinder.