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Alaska Communications Systems Group Inc. Message Board

  • telecominvestordude Mar 26, 2013 4:37 PM Flag

    I think ALSK is crazy undervalued, and I'll explain why. Please refute me if you can.

    Right now the reason for the massively depressed stock price is that people think Verizon Wireless will come in and just kill it, and magically just take away customers from the GCI/ACS joint venture.

    However, it's not clear to me that Verizon Wireless is entering Alaska at all except for the legally-required 4G LTE towers they're putting up in the wake of their purchase of the 700 Mhz spectrum.

    Seriously, all they have is a few LTE towers at this point, and in the most populated areas. They're not going to pay roaming on them. So what? It doesn't make much difference overall to the GCI/ACS business.

    For VZW executives to spend the cash to make a full-bore entry into a state with the population less than half of the Cleveland metro area, spread into a geographic landmass the almost size of the entire eastern continental USA is just crazy. It would take an immense amount of hubris.

    Alaska already has the majority of its population using wireless communications. It's a mature market.

    If VZW is going to make a grand, massive entry into Alaska, I'm just not seeing it. Is there any evidence of this happening? There are zero VZW stores in Alaska. They have a grand total of 2 job openings in the entire state of Alaska on their employment site.

    Also, ACS sold the headquarters building to VZW. If VZW were some kind of existential threat, why would they do that?

    As for the combination with GCI, it only makes sense to build economies of scale. ACS will own 1/3 of the earnings from the company, put the dividends into de-levering for the next few years, and will for its part be able to put all its focus into its broadband network in Alaska. That's exactly what is best for the company and for its shareholders.

    If I said anything that is incorrect here about Verizon Wireless, please give me some information to refute me! I think Alaska Communications is the most ridiculously undervalued company out there right now and will keep buying shares as the price keeps falling.

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