AT&T Involved in $1.25 Billion Deal
RingPlus News Service Los Angeles April 10th, 2017: AT&T has announced that it has reached an agreement to purchase Straight Path Communications for $1.25 Billion. This deal, announced early on Monday, is to help AT&T better position itself before it releases its 5G capabilities.
A major reason to AT&T’s buyout of the company was that Straight Path Communications is one of the nation’s largest holders of 28 GHz and 39 GHz millimeter wave spectrum. This is important for AT&T as they hope to deploy this new 5G technology on this wave spectrum. AT&T states that this new technology “will accelerate the delivery of new experiences for customers and businesses like virtual and augmented reality, telemedicine, autonomous cars, smart cities and more.”
The sale of the company comes to as a surprise to many of those who watch the market. Straight Path Communications has been a target for short sellers recently. Following a recent $15 million settlement with the FCC, few saw a deal being completed. The deal was also seen as unlikely due to “an abundance of competing spectrum” on the market. This morning, the deal has made Straight Path shares go up 125%. A single $5 share purchased in 2014 is now worth $95.63.