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Alaska Communications Systems Group Inc. Message Board

  • fishingfishedfish fishingfishedfish Mar 25, 2013 5:34 PM Flag

    Is something evil happening to ALSK? My 5c

    Obviously there are ISSUES as the stock has declined from over $10 to under $2 in two years. However, none of those issues have showed up in financial results, which have been improving. The AWN agreement has me a bit perplexed. I don't know why ALSK is giving up control of its wireless assets just to de-lever. The deal is both good (in the short run) but bad (in the long run). Regardless the current share price reflects something much worse going on.

    Why did they need this complicated deal with GCI when there's a better one staying it alone or selling their wireless business outright to VZ. Even though VZ is building out 4G in ALSK, all voice traffic of any newly acquired subs by VZ will go over ALSK's 3G network (4G networks are only used for data!) - roaming revenue to ALSK will actually increase as VZ enters the market. Also it's likely that VZ is going to require backhaul and PP&E from ALSK to grow and maintain it's network with the lower 48 - I'm not that technical so not sure that is true, but it does still seem like VZ needs ALSK. At least VZ likely needs ALSK's network in the interim to spending possibly hundreds of millions to replicate it? Regardless the AWN seems needlessly complicated, a concoction of GCI and bankers which ALSK shareholders are paying for ($13m in legal and advisory fees upon closing alone).

    Why have no shareholders gone activist to try to uncover what could be going on here? I own shares, but not enough to meaningfully count. In the meantime i'll continue buying more at these levels with the hope that someone more resourceful gets involved....any well reasoned comments are appreciated

    Sentiment: Strong Buy

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    • Likely the entry of Verizon into Alaska will muddy the waters - can Alaska really support one more player without one going belly up? Eventually someone will buy the assets of ALSK, or perhaps they will survive in another manner (business systems only?) . . .but it is a risk at this point, so under $2 is likely where they will stay until the picture is clear. Many of us thought Verizon would just make an offer - they could now buy ALSK with pocket change, but guess VZ has other ideas.

      • 1 Reply to mentges
      • Muddy waters for sure....;the game I don't get is why ALSK would give up control of their wireless assets so cheaply especially when roaming revs from VZ are expected to increase over the short-term (I got this insight from the company's own recent presentation to bondholders) - this should give ALSK more leverage to extract higher roaming fees from VZ in the short term with their increased reliance on ALSK's 3G network to carry voice calls. It's clear to me that something is afoot that ALSK/GCI maybe even VZ and their bankers aren't being forthright about to equity owners.

        I also believe management should be more pro-active about addressing the drop in the share price - especially since they own more shares today than they have at any point in the past (checked a lot of Form 4's - obviously somewhat a function of the stock drop and RSU vesting - but they are holding the stock, not dumping it).

        What worry's me is this 'Eventually' talk about someone buying ALSK's assets....that's why I think this seems ripe for an activist to whip management into shape. When things clear up I'm hoping the correction in ALSK higher is quick.

        Sentiment: Strong Buy

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