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regulators, mergers & exits -3

09:29 07-Feb-19


The 10-Q that IDT filed yesterday disclosed the following:

Following the resumption of operations by the relevant U.S. government agencies on January 25, 2019, CFIUS informed the parties that the initial review period would conclude on February 5, 2019.  Recently, CFIUS informed the parties that its national security review has been extended and this additional phase of the CFIUS review will conclude no later than March 22, 2019.
For the record, that's exactly what I've been warned about when the company seemed to be saying otherwise, about a week ago, and really, all along.   It's noteworthy that this potentially puts us into a resumed government shutdown.  A glance at the graph in the INVN section should show you that this could get much worse in terms of IDTI share pricing, but I've been consistent in saying there has been no reason to hold shares for quite some time now.  The actual business has been chugging along quite nicely, for whatever that's worth, with more progress on the next wave of data center communications, decent financial results and the announcement of another IoT partnership this morning.

Regulators elsewhere have been much busier.  The Federal Reserve has finalized its updates to the CCAR stress testing that is required for big banks under Dodd-Frank, including new scenarios.  I've seen massive scale-back of their associated trading businesses, which is quite good for BGC Partners.  When you put that together with the fincancial No-Deal Brexit safeguards mentioned at the beginning of the week, it makes me want to start pounding the table about BGCP.  We'll see what next week's tariff talks bring, though, in addition to the earnings calls.  It's possible that we'll have to wait at least another quarter for a break-out, probably in conjunction with a dividend bump.