Ares Management (NYSE:ARES) LLC, a significant stakeholder in Frontier Communications (OTC:FTRCQ) Parent, Inc. (NASDAQ:FYBR), disclosed the sale of a substantial number of shares in recent filings with the Securities and Exchange Commission. Over the course of two days, November 18 and 19, Ares Management sold a total of 283,702 shares of common stock. The transactions were executed at prices ranging from $34.8118 to $34.9194 per share, resulting in a total sale value of approximately $9.89 million.
Following these transactions, Ares Management's holdings in Frontier Communications were reduced to 38,606,806 shares. The shares were sold indirectly, as noted in the accompanying footnotes of the filing, which detailed the complex ownership structure involving multiple entities under the Ares Management umbrella.
Ares Management, based in Los Angeles, manages various funds and entities, including ASOF II Frontier Holdings and ACOF VI Frontier AIV. The reported sales reflect strategic financial decisions by the investment management firm, which is known for its involvement in private equity and credit investments.
In other recent news, Frontier Communications' shareholders have approved a merger with Verizon Communications (NYSE:VZ), marking a key milestone in the telecommunications industry. The merger, announced in 2024, is expected to enhance the reach and capabilities of both companies. Frontier reported a 2% revenue increase in Q2 2024, reaching $1.48 billion, along with a 5% growth in EBITDA. However, the company faced a stock downgrade from Raymond (NS:RYMD) James due to concerns about the shareholder vote. Notably, Carronade Capital and Cooper Investors opposed the acquisition, arguing that Verizon's offer undervalues Frontier. Frontier was also awarded seven ConneCTed Communities grants and secured over $23 million in grants to expand high-speed fiber broadband service. Meanwhile, Verizon Communications maintained a Buy rating from TD (TSX:TD) Cowen following third-quarter results. These are recent developments in the companies mentioned.
InvestingPro Insights
The recent share sale by Ares Management LLC comes at a time when Frontier Communications Parent, Inc. (NASDAQ:FYBR) is experiencing mixed financial signals. According to InvestingPro data, FYBR has seen a strong return over the last three months, with a 21.03% price total return. This positive momentum extends to a 30.5% return over the past six months and an impressive 66.03% over the last year.
Despite these gains, InvestingPro Tips highlight some potential concerns for investors. The company operates with a significant debt burden, and short-term obligations exceed liquid assets. This financial structure may explain Ares Management's decision to reduce its stake, potentially to mitigate risk exposure.
Furthermore, FYBR's profitability outlook appears challenging. InvestingPro Tips indicate that analysts do not anticipate the company will be profitable this year, and net income is expected to drop. This is reflected in the negative P/E ratio of -72.26 for the last twelve months as of Q3 2023.
It's worth noting that FYBR does not pay a dividend to shareholders, which may influence investment strategies for income-focused investors. However, the company's revenue growth, albeit modest at 1.65% for the last twelve months, and a strong gross profit margin of 64.38% suggest operational resilience.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips for FYBR, providing a deeper understanding of the company's financial health and market position.
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