A little birdie told me over the weekend a few details regarding the Helio and Virgin Mobile merger rumor that surfaced early last week. Sky Dayton, Helio’s former CEO and now Chairman, had a meeting with Best Buy during CTIA where I’m told Dan Schulman, CEO of VM, was also present. This is a big deal because Helio is making the play for mass distribution which adds a bit of fodder to the rumors about a merger.
Best Buy sells Virgin Mobile handsets like hotcakes, but their devices are less than desirable. VM has a stellar business, but there isn’t much room for them to grow, which is why their stock is undervalued. Helio, on the other hand, obviously offers bitchin’ devices and they were the first to offer the $100 unlimited plan before the major carriers followed suit.
Helio is burning cash and it will likely run out soon regardless of SK Telecom’s investment. It’s unclear how SKT will factor into this in the long run if the merger goes through, but it’s probably a safe bet that Helio will move to New Jersey because it’s cheaper to run and they’ll turn a profit much faster. That last bit is based on conjecture, but Helio and VM meeting with Best Buy together is the real deal. We’ll see what else we can dig up.