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SHEN – Maybe not the free lunch that it looks like?

I am not a financial advisor, I do not have a crystal ball, I am a random ape who spent more time writing this up than researching the facts. There seems to be a lot of misinformation (likely for pump purposes) or lazy research out there.

**If you’re just riding the pump or are doing a covered call play, god speed. You may not care about this post.**

For anyone actually planning on holding through August 3, 2021, especially those trading on RH, please consider the following:

Shen sold their telecommunication business to T-Mobile (T) for $1.94 Billion (I’ll refer to this as TA)

$936.6 million to shareholders via special divided of $18.75

$684 is going to be used to pay down debt

The rest towards taxes I believe

After the sale of the telecommunication business, Shen will shift its focus to it’s broadband and tower business. I’ll refer to Shen post-sale of their telecom business as ShenP.

PE and Earnings Moving Forward

The EPS for **TA** for 2020 was $2.48 and $0.97 last quarter (this is very solid)

The EPS for **ShenP** was $0.05 in 2020 and a solid $0.06 last quarter, 2022 forecasted EPS of $0.29

The revenues for **ShenP** were $220.78M and are forecasted to grow 10.6% for 2021 ($244.2M) and 2022 ($270M)

Google and yahoo give you a PE of 18.59 (I’ve seen this same number in posts), but **ShenP’s** PE for last Q’s earning is closer to 254 and the forecast for 2022 is a PE of 210. These are based on $61 per share. Let’s say you’re still comfortable dealing with share price of $42.25 (61-18.75) because you get that juicy dividend, the PE is still very high at 176.

I’ve also seen a lot of information and spamming of don’t worry about your shares there will be a buyback after August 3, 2021. The buyback is about $20 million dollars. This is not worth talking about. Insignificant. Just being used as pump fodder. (Haven’t see anything else related to a buyback)

Insiders didn’t hold many shares but they have been dumping this thing and now hold less that 1% of shares, sales as recent as June 10, 2021 for $50.43.

To those of you without premarket capabilities, you are far more likely to get stuck hold bags during the eventual sell off. So what’s a company with $220.78M revenue and a forward guided EPS of $0.29 worth to you? If you buy it at $61 and are stuck holding the bag at $42.25, the special dividend premium was eaten up by your loss, you’re saying that company is worth $2.1 Billion dollars. **You’re paying $160M more than T-Mobile paid it’s acquisition but the company you own has 16x less earnings.**

For transparency, I hold puts, many many puts. I am not trying to create FUD or telling you to sell, I just want people to know what they are buying, I decided to use forward guidance and last Q which was solid for **ShenP** instead of 2020 numbers to try to be as fair as possible. If any of this looks inaccurate, please let me know.

What do you think?

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7 Comments

  1. Thought I was a fucking genius last week, bought $50 puts and 15k of shares thinking id collect on that sweet dividend and then when it fell to around 35 id collect again. Surprisingly, I woke up to a $4 share gain because of the people even more stupid then I on this board and made a $1,000. Thanks idiots.

  2. I have got some SHEN at 57,50 and now i am waiting to get profit in short term.

    Bullish

    ![gif](emote|free_emotes_pack|give_upvote)

    ![gif](emote|free_emotes_pack|money_face)

    PS: do not be to greedy and get the profit even if it is small!!

  3. Math:

    Remaining co will have 2022 EPS ~$1.2

    Share price of 55 now less dividend of 18.75= 36.25 afterwards.

    36.25 share price divided by 1.2 per share earnings = 30.0x PE.

    Arguably, earnings would go up because they have less overhead required now.

    Unsure but margins on remain co business is potentially higher.

    ?

  4. You only have to hold through july 13th to receive the dividend and of course it will be pumped and there probably will be a huge sell off after. My plan is to buy a few hundred while also probably buying some october/September puts.

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