Leading activist investor Jana Partners has called upon Frontier Communications Parent Inc. to initiate a thorough strategic review and consider a potential sale in an effort to reverse the company’s underwhelming stock performance.
Jana Partners stated that Frontier has failed its shareholders as a public company, highlighting the gross undervaluation of its equity and forecasting continued underperformance if the current board maintains the status quo.
To create shareholder value, Jana Partners proposes that Frontier’s board immediately begin a strategic review, which may include exploring a potential sale. Additionally, the investment firm suggests the creation of a joint venture and the sale of non-core assets to expedite Frontier’s transformation into a pure-play fiber provider.
Frontier Communications has yet to comment on Jana Partners’ statement. However, in early November, the company surprised investors by swinging to an adjusted quarterly profit and reporting earnings in line with Wall Street’s expectations.
Nevertheless, Frontier’s stock has experienced a 7% decline year-to-date, in stark contrast to the approximately 19% gains seen in the S&P 500 index.