In late 2013, multiple media outlets reported that telecom giant Sprint Corp. and its parent company Softbank were trying to buy a majority stake in phone carrier T-Mobile. An interested telecom investor asked Tactical Rabbit to investigate, to learn if the multi-billion-dollar merger would be approved.
The early odds favored the merger. Tactical Rabbit investigators got busy. “Tactical Rabbit has launched an intelligence operation, which allows us to profile many of the DOJ and merger decision makers,” said CEO Everett Stern. Commenting on the merger in a public report in June 2014, Stern stated, “I don’t believe that the Department of Justice will approve the deal.”
The case exemplifies the full range of Tactical Rabbit’s services. By working closely with former CIA and FBI investigators, Tactical Rabbit built a behavioral profile of the CEOs of Sprint and T-Mobile, and the key government regulators weighing the merits of the deal. Combined with a shoe-leather investigation into the merits of the case, Stern determined early on that the deal would fall through or fail to be approved.
The antitrust concerns were too great, and worries about price fixing too high. “Some people might call this a hurdle, but we believe it’s more of a wall. I do not think, based on our investigation combined with prior rulings from the government, that this merger will go through,” Stern wrote in June 2014.
Indeed, just two months after the Tactical Rabbit report went live, the New York Times reported that Sprint had abandoned its bid to acquire T-Mobile, “after conceding that antitrust regulators would block a deal in an industry that is dominated by just a few large players.”
Tactical Rabbit had provided its client with accurate, actionable intelligence, enabling it to short Sprint stock and reap the benefits.