Overview
The quiet period for the Altice (ATUS) IPO is scheduled to expire on July 17, 2017. Beginning on July 18, 2017, the company's underwriters will be able to release recommendations and reports about the company. This is according to SEC guidelines.
We believe that the release of the reports could result in a temporary boost in the share price, providing a short term buying opportunity for experienced investors.
Our firm has research price movement around quiet period expirations, and results can be found here.
(Company Website)
Business Summary
Altice USA Inc. is based in Bethpage, New York and was formed when its parent company, Altice Inc., bought Cablevision Systems and Suddenlink for $26.8 billion. The company provides services to 8.5 million homes in 18 states, including areas of Texas and parts of metropolitan New York. Altice generates revenue through several streams including: Residential (Pay TV, Broadband, and Telephony), as well as Business Services, and Advertising.
IPO Performance
Altice USA made its market debut on 6/21, raising $1.9B through the offer of 63.9M shares and making it the second largest IPO in 2017, behind only Snap Inc. (SNAP) Shares priced at $30, above the mid-point of its initial price range of $27 - $31, and insiders offered additional shares due to high demand.
Shares then increased 9.0% on the first day of trading and have stayed relatively flat since then. Shares current trade at $32.27 (7.10 Close).
Management team highlights
Dexter Goei serves as chairman and CEO of Altice USA, positions he has held since 2016. Goei first joined the Altice Group in 2009 as its CEO. Prior to that, Goei had 15 years of experience working in investment banking at JP Morgan and Morgan Stanley. He completed his undergraduate education at the Georgetown University School of Foreign Service, graduating cum laude.
Charles Stewart has served as the CFO and a co-president of Altice USA since 2015. Prior to that, Stewart amassed 21 years of experience in finance, corporate and investment banking in the U.S., Europe and Latin America. Stewart completed his undergraduate education at Yale University.
Financial Overview
The company reported total revenues of $628M and $2.3B for the three months that ended on March 31, 2017, and 2016, respectively. During those same periods, the company reported net losses of $190.1 million and $76 million, respectively. As of its IPO, Altice had total debt of $24.1 million.
Prior to the IPO, we were bullish on the company, but wary of its high debt load ($3.5B). The company has used a portion of its proceeds to repay its senior notes, but give it large load, still has a substantial liabilities.
Conclusion: Quick Buying Opportunity For Experienced Investors
Altice made quite a splash being the largest telecom IPO since 2000.
The company has performed well since its IPO and looks positioned for further growth as the quiet period on underwriters is set to expire.
We predict this powerful syndicate, which includes J.P. Morgan, Morgan Stanley, Citi, and Goldman Sachs, among others, will be eager to spread positive words about this company they've supported by publishing detailed positive reports to their institutional and retail clients around the world.
We recommend investors consider buying shares ahead of the July 17 expiration date to benefit from what we expect will be a temporary positive boost in stock price.
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