Re: NOL Rights plan and potential acquisition of CTL
I know predicting a buyout is always a long shot, but:
1) Jeff Storey has a history of grooming companies to be bought out
2) CTL’s main activities – reducing debt, shedding unprofitable products and contracts, expanding fiber routes, connecting more buildings, winning long term contracts, settling suits, and cutting costs (transformation) – all make the company more attractive to potential buyers.
3) I sensed efforts to reduce expectations to keep the stock price low – next quarter is seasonally low, large contracts will have no impact but costs, guidance shows no growth, and the year will be lumpy. Stockholders are more likely to approve a buyout proposal if the stock price is low.
4) CTL is actively talking to several companies about joint ventures or purchasing whole or parts. This means companies are interested and we know their interest is not legacy consumer assets.
Jeff Storey loading up on CTL stock may have been the beginning of a buyout search. We would never know until all the details have been worked out and the synergies have been identified.