Ares Management (NYSE:ARES) LLC, a significant shareholder in Frontier Communications (OTC:FTRCQ) Parent, Inc. (NASDAQ:FYBR), has recently sold a substantial portion of its holdings in the company. According to a Form 4 filing with the Securities and Exchange Commission, Ares Management sold a total of 588,824 shares over two transactions.
The sales occurred on November 22 and November 25, with the shares sold at prices ranging from $34.815 to $34.8771 per share. The total value of these transactions amounted to approximately $20.5 million. Following these transactions, Ares Management and its affiliated entities now hold 37,537,847 shares of Frontier Communications.
These transactions were conducted through various entities associated with Ares Management, including ASOF II Frontier Holdings and other related funds. The shares are held indirectly, as noted in the filing, with specific details outlined in the accompanying footnotes.
In other recent news, Frontier Communications' shareholders have overwhelmingly approved a merger agreement with Verizon Communications (NYSE:VZ), marking a significant step towards the company becoming a wholly owned subsidiary of Verizon. This approval comes after Frontier reported a 2% revenue increase in Q2 2024, reaching $1.48 billion, and a 5% growth in EBITDA. However, the company faced a stock downgrade from Raymond (NS:RYMD) James due to concerns about the shareholder vote. Opposition to the merger has also been voiced by Carronade Capital and Cooper Investors, who argue that Verizon's offer undervalues Frontier.
In other developments, Frontier was awarded seven ConneCTed Communities grants and secured over $23 million in grants to expand high-speed fiber broadband service in Connecticut, San Bernardino, and Riverside counties. On the other hand, Verizon Communications maintained a Buy rating from TD Cowen following third-quarter results. These are some of the recent developments regarding Frontier Communications and Verizon Communications.
InvestingPro Insights
Ares Management's recent sale of Frontier Communications Parent, Inc. (NASDAQ:FYBR) shares comes at a time when the company's stock has shown strong performance. According to InvestingPro data, FYBR has experienced a robust 62.91% price total return over the past year, with a particularly strong 36.36% return in the last six months. This upward trend might have influenced Ares Management's decision to capitalize on the stock's gains.
Despite the positive stock performance, InvestingPro Tips highlight some potential challenges for Frontier Communications. The company operates with a significant debt burden, and short-term obligations exceed liquid assets. This financial situation could be a factor in Ares Management's decision to reduce its stake.
Additionally, InvestingPro Tips indicate that analysts do not anticipate the company will be profitable this year, with net income expected to drop. This outlook, combined with the fact that 4 analysts have revised their earnings downwards for the upcoming period, suggests some caution regarding FYBR's near-term financial prospects.
It's worth noting that FYBR does not pay a dividend to shareholders, which may impact its attractiveness to certain investors. However, with a market cap of $8.68 billion and revenue of $5.86 billion in the last twelve months, Frontier Communications remains a significant player in its sector.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights on FYBR, with 10 more tips available on the platform to help inform investment decisions.
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