VZ
Dow, meet the door
Verizon spent Tuesday looking less like a sleepy dividend darling and more like a stock that just got handed a moving box. The company officially exited the Dow Jones Industrial Average, and index-tracking funds promptly did what index-tracking funds do: sell first, ask questions never.
The BT deal isn't exactly free lunch
The bigger story for investors is Verizon's new 50-50 joint venture with BT Group. Verizon is folding in its international wireline connectivity and managed network services business, tossing in a $625 million cash payment, and helping create a deal that will hand BT a meaningful payout.
That sounds strategic in the press-release version. In the earnings-model version, it means Verizon expects a second-quarter loss of $700 million to $800 million tied to classifying the business as held for sale, plus another $350 million to $450 million in severance and $200 million to $300 million in asset-rationalization charges. Translation: the restructuring bill is not subtle.
Why you should care
For shareholders, this is one of those classic corporate cleanups where the long-term logic may be real, but the short-term optics are a mess. Verizon is also expected to report on July 24th, so this deal-related bruising could hang over the next earnings print like a very uninvited guest.
Big picture: Verizon may be trying to slim down and sharpen its focus, but the market is mostly noticing the price tag. And right now, the stock looks like it's paying for the renovation before anyone's moved into the new place.