Numbers, schmumbers. Who needs hard data when you can just look at the demeanor of executives on the stand?
That is the view of District Judge Victor Marrero, who on Tuesday ruled in favor of allowing the Sprint S, +77.50% merger with T-Mobile US TMUS, +11.78% to proceed against the pleas of several states including New York and California who said the deal would harm competition and lead to larger price increases than would otherwise be the case.
First, the judge wrote, how can he possibly make sense of competing figures?
‘The parties’ costly and conflicting engineering, economic and scholarly business models, along with the incompatible visions of the competitive futures their experts’ shades-of-gray forecasts portray, essentially cancel each other out as helpful evidence the Court could comfortably endorse as decidedly affirming one side rather than the other.’
So how else could he rule? Marrero said that during the two-week trial he had “ample occasion to observe the witnesses and assess their credibility and demeanor on the witness stand, and to consider the weight their testimony warranted in the light of the pointers referred to here and articulated below.”
The Clinton appointee said he disagreed with the states on three big points — one, that the combined T-Mobile would pursue anticompetitive behavior; two, that Sprint absent the merger would continue to operate as a strong competitor; and three, that Dish DISH, +7.14% would not be a strong competitor and live up to commitments to build a national wireless network.
New York Attorney General Letitia James said the states are reviewing their options including a possible appeal.
Sprint shares surged 75% at the opening bell, while T-Mobile gained 11%.