Ares Management (NYSE:ARES) LLC, a major stakeholder in Frontier Communications (OTC:FTRCQ) Parent, Inc. (NASDAQ:FYBR), has recently sold shares of the company, according to a recent SEC filing. The sales, conducted over two days, involved a total of 283,702 shares of common stock. The transaction prices ranged from $34.8118 to $34.9194 per share, resulting in a total sale value of approximately $9.89 million.
Following these transactions, Ares Management now holds 38,606,806 shares in Frontier Communications. The sales were executed on November 18 and 19, as disclosed in the filing. Ares Management, along with various affiliated entities, remains a significant shareholder in the telecommunications company.
These transactions are part of Ares Management's ongoing investment strategy and portfolio management. The firm, based in Los Angeles, has a broad portfolio across various sectors, including telecommunications. Frontier Communications, headquartered in Dallas, continues to be a key player in the telephone communications industry.
In other recent news, Frontier Communications shareholders have approved a merger agreement with Verizon Communications (NYSE:VZ). The merger is a key step in Frontier's plan to become a wholly owned subsidiary of Verizon. The approval followed Frontier's Q2 2024 earnings report, which showed a 2% revenue increase, 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. This downgrade comes amidst opposition from investment firms Carronade Capital and Cooper Investors, who argue that Verizon's offer undervalues Frontier.
Simultaneously, Frontier has secured over $23 million in grants to expand high-speed fiber broadband service in Connecticut, San Bernardino, and Riverside counties. Meanwhile, Verizon Communications maintained a Buy rating from TD (TSX:TD) Cowen following their third-quarter results.
These recent developments reflect the ongoing dynamics in the telecommunications industry, as companies like Frontier and Verizon navigate mergers, financial performance, and market assessments from analyst firms.
InvestingPro Insights
While Ares Management has reduced its stake in Frontier Communications Parent, Inc. (NASDAQ:FYBR), the company's recent performance and market position offer a mixed picture for investors. According to InvestingPro data, FYBR has shown strong momentum, with a 66.03% price total return over the past year and a 30.5% return over the last six months. This aligns with an InvestingPro Tip highlighting the company's "strong return over the last three months."
However, potential investors should note that FYBR operates with significant financial challenges. An InvestingPro Tip indicates that the company "operates with a significant debt burden," which is particularly relevant given Ares Management's recent share sales. Additionally, FYBR's short-term obligations exceed its liquid assets, suggesting potential liquidity concerns.
Despite these challenges, FYBR's revenue for the last twelve months stands at $5,857 million, with a gross profit margin of 64.38%. This demonstrates the company's ability to generate substantial revenue, though profitability remains a concern. In fact, another InvestingPro Tip reveals that analysts do not anticipate the company will be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips for FYBR, providing deeper insights into the company's financial health and market position. These additional tips can be particularly valuable in light of the recent insider selling activity by Ares Management.
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