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Stock Market & Financial Investment News

News Breaks
July 29, 2014
12:23 EDTS, WIN, CTL, T, FTR, VZWindstream REIT spin off plan provides jolt for stock, telecom sector
Shares of Windstream (WIN), which provides network communications services to businesses and residential consumers, are jumping after the company announced that it would spin off some of its assets into a real estate investment trust, or REIT. Two research firms had very different reactions to the move. WHAT'S NEW: Windstream said that it would spin of some of its assets, including its fiber and copper networks and other real estate, as a REIT. Expected to be completed by the first quarter of next year, the tax-free spinoff will enable Windstream to realize significant financial flexibility by lowering its debt by approximately $3.2B and increasing free cash flow to accelerate broadband investments, transition faster to an IP network and pursue additional growth opportunities, the company said. The REIT will be positioned to provide an attractive dividend to shareholders and grow revenue through lease escalation, capital investment and acquisitions, Windstream added. Windstream noted that the IRS had granted preliminary recognition of the tax-free nature of the spinoff and the qualification of the spun off assets for REIT status. The company said it expects to pay a dividend of 10c per share after the transaction, while the REIT will pay an annual dividend equivalent to 60c per share. REITs do not pay taxes on income that they distribute to unitholders. ANALYST REACTION: In a note to investors today, Oppenheimer analyst Timothy Horan said that the move would enable Windstream to avoid about $200M each year in potential taxes. The analyst noted that Windstream was cutting its overall dividend to 70c from $1, but he believes that the dividend has become much safer. Furthermore, the move is intelligent from a strategic, operational, and financial viewpoint, he believes. With its new structure, Windstream is worth at least $15 per share and could be worth as much as $18 per share, Horan estimated. The analyst kept a Perform rating on the stock. Much more skeptical about Windstream's move was Mike McCormack, an analyst at research firm Jefferies. The REIT spin-off is "an elegant way" for Windstream to cut its dividend, McCormack contended. The move does not change the company's fundamentals and calls into question the stock's valuation, as the portion of the company not spun off into the REIT appears to be a non-facilities based provider, the analyst wrote. As a result, Windstream's valuation is questionable, he contended. McCormack kept a $6 price target and Underperform rating on the shares. WHAT'S NOTABLE: Horan and McCormack both believe that other telecom companies with wireline businesses could follow Windstream's lead and spin off assets into a REIT. By obtaining a favorable preliminary ruling from the IRS, Windstream has already cleared the biggest hurdle to a REIT conversion, possibly setting the stage for other companies in the sector to follow suit, McCormack stated. If Windstream is able to carry out the spinoff, it means that every non-REIT communications and cloud company covered by Oppenheimer is now about 20% undervalued, wrote Horan. However, UBS analyst Scott Arwin does not expect large telecom companies like Verizon (VZ) and AT&T (T) to follow Windstream's lead, as he does not think the larger companies will want to open their networks to competitors at regulated rates. PRICE ACTION: In midday trading, Windstream rose 12% to $11.80. The stock was well off its high for the day of $13.30. Other stocks in the sector also rose, with Frontier Communications climbing 12% to $6.64, Century Link (CTL) advancing 4% to $39.15, AT&T (T) gaining 3.3% to $36.83, Verizon (VZ) rising 1.8% to $52.50 and Sprint (S) adding 1% to $7.75.
News For WIN;VZ;T;S;FTR;CTL From The Last 14 Days
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February 19, 2015
10:57 EDTSSprint commences $1B senior notes offering
Sprint announced that it has commenced an underwritten public offering of $1B aggregate principal amount of notes. Sprint intends to use the net proceeds for "general corporate purposes, which may include, among other things, working capital requirements, retirement or service requirements of outstanding debt and network expansion and modernization." The joint book-running managers for the offering are Citigroup, Goldman Sachs, .J.P. Morgan Securities, Merrill Lynch, Barclays, Credit Agricole, Credit Suisse, Deutsche Bank, Mitsubishi UFJ, Mizuho, RBC Capital, Scotia Capital and SMBC Nikko Securities.
10:52 EDTSSprint files automatic mixed securities shelf
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10:15 EDTWINWindstream to host a virtual special shareholder meeting
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08:54 EDTTAT&T fiber-optic internet charges users $29 to avoid tracking, WSJ says
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06:24 EDTVZVerizon names John Stratton as head of wireless and wireline operations
Verizon said in a filing that on February 17, the company reorganized its operating structure. John G. Stratton, formerly Verizonís EVP and President Ė Global Enterprise and Consumer Wireline, has been appointed to a new role as EVP and President of Operations, with operational responsibility for Verizonís wireless and wireline businesses. Stratton will continue to report to Lowell C. McAdam, Chairman and CEO of Verizon. Daniel S. Mead, formerly Verizonís EVP and President and CEOĖ Verizon Wireless, has been appointed to a new role as EVP and President of Strategic Initiatives, with responsibility for directing the transfer of Verizonís wireline operations in California, Florida and Texas to Frontier Communications Corporation. Mead will continue to report to McAdam. Mead expects to retire following the completion of the strategic initiatives on which he is working.
February 18, 2015
10:05 EDTCTLOn The Fly: Analyst Downgrade Summary
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09:10 EDTCTLOn The Fly: Pre-market Movers
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07:13 EDTVZNational Association of Regulatory Utility Commission to hold a meeting
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05:31 EDTCTLCenturyLink downgraded to Sell from Neutral at Goldman
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February 17, 2015
18:06 EDTVZ, SPaulson & Co gives quarterly update on stakes
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16:22 EDTVZOn The Fly: Closing Wrap
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16:00 EDTVZOptions Update; February 17, 2015
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13:18 EDTSOmega Advisors gives quarterly update on stakes
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12:12 EDTTAT&T to match Google Fiber speed, pricing in Kansas City area, KC Star says
AT&T (T) announced on Sunday that it would offer Internet service in Kansas City and several of itssuburbs, with the same speed and pricing as Internet service provided by Google's Google Fiber service in the region, according to The Kansas City Star. Reference Link
10:41 EDTVZCablevision downgraded to Sell from Neutral at UBS (pre-open)
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10:39 EDTVZCablevision sinks after analyst sees Verizon threat, cuts to sell
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09:58 EDTVZVerizon says 'pleased' with 181 spectrum licenses acquired for $10.4B
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09:19 EDTTDocument Security files patent infringement claims against Intel, others
DSS Technology Management, a subsidiary of Document Security (DSS), announced the filing of a patent infringement lawsuit against the Intel (INTC); Dell; GameStop (GME); Conn's Inc. (CONN) and Conn Appliances; NEC Corporation of America; Wal-Mart Stores (WMT) and Wal-Mart Stores Texas, and AT&T (T) in the United States District Court for the Eastern District of Texas, Tyler Division. DSS's complaint alleges infringement by Intel, Dell, GameStop (GME), Conn's, NEC, Wal-Mart, and AT&T of US Patents 5,965,924 and 6,784,552, which relate to semiconductor manufacturing.
09:07 EDTWINGlass Lewis recommends Windstream holders vote FOR proposals
Windstream that proxy advisory firm Glass Lewis recommends that Windstream stockholders vote "FOR" the proposals being presented for approval at the special meeting of stockholders on Feb. 20. Glass Lewis recommends voting "FOR" a 1-for-6 reverse stock split and an amendment to a Windstream subsidiary's charter to allow conversion of the subsidiary to a limited liability company. Institutional Shareholder Services also has recommended that shareholders vote "FOR" the proposals.
06:15 EDTVZCiti sees three options for DISH, including sale to Verizon
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