Ares Management (NYSE:ARES) LLC, a significant stakeholder in Frontier Communications (OTC:FTRCQ) Parent, Inc. (NASDAQ:FYBR), has recently sold a substantial portion of its holdings in the company. According to a recent SEC filing, Ares Management divested a total of 480,135 shares over two consecutive days, November 20 and November 21, 2024.
The sales were executed at prices ranging from $34.6883 to $34.7934 per share, resulting in a total transaction value of approximately $16.68 million. Following these transactions, Ares Management's indirect ownership in Frontier Communications stands at 38,126,671 shares.
The transactions were part of a series of sales by various entities associated with Ares Management, including ASOF II Frontier Holdings and other related partnerships. The shares were sold under indirect ownership, with the nature of ownership detailed in the footnotes of the filing.
In other recent news, Frontier Communications' shareholders have approved a merger with Verizon Communications (NYSE:VZ), marking a significant milestone in the process. This development comes on the heels of Frontier's Q2 2024 earnings report, which showed a 2% revenue increase to $1.48 billion and a 5% growth in EBITDA. Despite this, Frontier's stock was downgraded from 'Strong Buy' to 'Market Perform' by Raymond (NS:RYMD) James due to concerns surrounding the shareholder vote. Meanwhile, Carronade Capital and Cooper Investors have voiced opposition to the merger, arguing that Verizon's offer undervalues Frontier. In addition, Frontier secured over $23 million in grants to expand high-speed fiber broadband service in various counties, and was awarded seven ConneCTed Communities grants. On the other hand, Verizon Communications maintained a Buy rating from TD Cowen following its third-quarter results. These are the recent developments for both companies.
InvestingPro Insights
As Ares Management reduces its stake in Frontier Communications Parent, Inc. (NASDAQ:FYBR), investors may want to consider additional insights from InvestingPro to better understand the company's financial position and market performance.
According to InvestingPro data, Frontier Communications has a market capitalization of $8.68 billion. Despite the recent share sales by Ares Management, the stock has shown strong performance, with a 66.35% price total return over the past year and a 31.17% return over the last six months.
However, potential investors should be aware of some challenges facing the company. An InvestingPro Tip highlights that Frontier operates with a significant debt burden, which could impact its financial flexibility. Additionally, the company is not currently profitable, with a negative P/E ratio of -72.5 for the last twelve months as of Q3 2024.
On a positive note, Frontier's revenue for the last twelve months as of Q3 2024 stood at $5.86 billion, with a gross profit margin of 64.38%. This indicates that despite profitability challenges, the company maintains a strong revenue base and healthy gross margins.
For those considering an investment in Frontier Communications, it's worth noting that InvestingPro offers 10 additional tips for this stock, providing a more comprehensive analysis of the company's financial health and market position.
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