Is Frontier Communications a Buy?
A few years ago, Frontier Communications (NASDAQ: FTR) made a more than $10 billion bet on cable right before the entire pay-TV industry took a nosedive. Essentially, the company laid out that cash to acquire a sizeable batch of new customers, many of whom were going to start cutting the cord no matter what cable provider they had.
At the time that Frontier CEO Daniel McCarthy sealed the bargain to acquire Verizon's wireline businesses in California, Texas, and Florida, his strategy sort of made sense. When it closed in April 2016, the deal roughly doubled the size of the cable, phone, and internet company, giving it added scale that would allow it to lower costs.
Then the bottom fell out. Yes, Frontier did save money through synergies -- about $1 billion per year, with more to come -- but it has also lost net subscribers in every quarter since, and that downward trend seems unlikely to abate.
Source Fool.com
