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Here's Why Straight Path (STRP) Stock Soared Again Today

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Shares of Straight Path Communications Inc. skyrocketed on Tuesday morning on news that the company has received a “superior” buyout offer to AT&T Inc.'s (T - Free Report) recent takeover attempt.

Straight Path, the wireless spectrum holding company, said it has a new $104.64 per share buyout offer from a "multi-national telecommunications company." The new deal comes in well above AT&T’s $95.63 per share buyout that was announced just over two weeks ago.

The new unsolicited Straight Path $1.8 billion buyout offer has sent its stock soaring as investors see a potential bidding war brewing.

Straight Path’s stock price was up 13.49% to $125.85 per share in morning trading on Tuesday.

AT&T recently offered to buyout the company for $1.25 billion, marking a 160% premium from Straight Path’s value at the time. The second-largest U.S. wireless carrier was willing to offer a big time buyout in order to acquire Straight Path’s massive amount of spectrum as the wireless giant works towards bolstering its 5G portfolio.

Straight Path currently holds the rights to 868 spectrum licenses. Most of the company’s wireless spectrum is in 28 GHz and 39 GHz bands, which are both included in the FCC’s designation for the next generation of wireless broadband services, also known as “5G.” Straight Path is one of the largest holders of 28 GHz and 39 GHz spectrum in the U.S.

Reuters reported that Straight Path has made AT&T aware of the new offer. Straight Path also informed AT&T that it has only five days to match or exceed the new bid.

In its initial acquisition statement from April 10, AT&T announced: “The acquisition will support AT&T's leadership in 5G, which will accelerate the delivery of new experiences for consumers and businesses like virtual and augmented reality, telemedicine, autonomous cars, smart cities and more.”

The race towards owning more spectrum could prove to be lucrative as wireless companies want to be the first to offer customers 5G wireless on a wide scale.

If you want to know more about the 5G Race read: Here's How To Invest In The 5G Data Revolution

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