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Wall Street is abuzz with rumors that Leap Wireless may go to the altar with MetroPCS Communications, a suitor it rejected a few years ago. The Wall Street Journal reports that Leap has hired Goldman Sachs to help the company assess its alternatives. Both Leap and MetroPCS sell discount wireless phone service, and Wall Street has long thought they should merge to fend off competitors, according to the Journal. In 2007, Leap turned down an offer from MetroPCS. That offer was for about five times Leap's current price. The Journal says that Verizon and AT&T probably aren't interested in Leap.

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Comments

Burwell Feb. 2, 2010 @ 10:45 p.m.

Both Leap and MetroPCS sell discount wireless phone service, and Wall Street has long thought they should merge to fend off competitors, according to the Journal.

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These mergers never work. Both Leap and MetroPCS should shut down their operations without delay and liquidate. If either company remains in business, they will shaft their shareholders and run up hundreds of millions in debt that in the end will never be repaid. Ultimately both companies are going to go out of business, regardless of whether there is a merger. Put these two horses out of their misery: liquidate and go out of business now.

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Don Bauder Feb. 3, 2010 @ 10:01 a.m.

Response to post #1: Good point. Most mergers fail. There is abundant evidence of this -- numerous studies. Wall Street keeps promoting mergers and acquisitions because it makes so much money on them (and takeover bids goose individual stocks). M&A activity, along with LBOs, are among the non-productive and counter-productive Wall Street initiatives against which I frequently inveigh. Leap has been in the tank once before. Best, Don Bauder

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