I believe that an AT&T (T) merger or investment in Telefonica (TEF) would be extremely intelligent at this stage in the game. Right now the U.S. mobile market is performing wonderfully and Europe is incredibly depressed. There is no reason to believe that conditions won’t improve in Europe and this would be an excellent opportunity to buy high quality assets at a very cheap price. I believe that the lower valuation makes for a better utilization of cash than a dividend or stock buyback. Telefonica’s best assets are in Latin America aand AT&T would benefit tremendously through increasing its exposure to that market. The 9% ownership stake in AMX creates a bit of a quandary, but I believe this would be a real positive step for AT&T. It also would be healthy for Spain in my opinion to promote foreign investment into the country.
INVESTING IN THE FINANCIAL MARKETS INVOLVES RISKS. OPTIONS ARE NOT SUITABLE FOR ALL INVESTORS.