TDS Swings to a $40M Profit — So Why Did One Investor Sell $43.9 Million of Shares?

On November 14, Connecticut-based Silver Point Capital disclosed selling 1.3 million shares of TDS, reducing its position by an estimated $43.9 million, SEC filings show.

What Happened

According to an SEC filing dated November 14, Silver Point Capital reduced its investment in Telephone and Data Systems (NYSE:TDS) by 1.3 million shares during the third quarter. The post-sale position stands at 857,000 shares valued at $33.6 million as of September 30. The transaction, estimated at approximately $43.9 million based on quarterly average prices, resulted in a sizable decrease in the fund's exposure to the company.

What Else to Know

After the sale, the TDS stake now represents 2.4% of Silver Point Capital L.P.'s reportable AUM, which puts it outside the fund's top five holdings.

Top holdings post-filing:

• NYSE:GPOR: $677 million (49.1% of AUM)
• NYSE:MSC: $111.7 million (8.1% of AUM)
• NYSEMKT:IAU: $97.1 million (7% of AUM)
• NASDAQ:SATS: $82.1 million (6% of AUM)
• NYSEMKT:IWM: $71.6 million (5.2% of AUM)

As of Wednesday, shares of TDS were priced at $39.41, up 15% over the past year and outperforming the S&P 500, which is up 13% in the same period.

Company Overview

Company Snapshot

• Telephone and Data Systems offers wireless, broadband, and wireline telecommunications services, including IoT solutions, smartphones, mobile devices, and cloud-based television platforms.
• The company generates revenue primarily through subscription-based service fees, equipment sales, and value-added services to both consumers and business clients.
• It serves individual consumers, businesses, and government customers across the United States, with a focus on wireless and broadband connectivity.

Telephone and Data Systems is a leading U.S. telecommunications provider with a diversified portfolio spanning wireless, broadband, and managed services. The company leverages its national footprint and technology investments to deliver integrated connectivity solutions to a broad customer base. Its scale and multi-segment approach provide resilience and competitive positioning in a rapidly evolving communications landscape.

Foolish Take

For long-term investors, Silver Point’s move matters because it comes as TDS is showing signs of operational stabilization after years of volatility—even as the stock remains deeply discounted relative to its mid-2000s highs. The company just delivered a sharp swing back to profitability in the third quarter, aided by strategic divestitures, improved cost structure, and accelerating progress in its fiber buildout. That momentum may help determine whether TDS’ multiyear slump has truly bottomed—or whether investor patience will be tested again.

According to a November 14 SEC filing, Silver Point Capital sold 1.3 million shares of Telephone and Data Systems during the third quarter, cutting the position to 857,000 shares worth $33.6 million. The sale reduced TDS to 2.4% of the fund’s reportable U.S. equity AUM, placing it well outside its top holdings.

Operationally, TDS posted $308.5 million in revenue, down 6% year over year, but swung to $40.2 million in net income versus a $100.4 million loss in the prior-year period. The company also repurchased more than 1 million shares and approved a new $500 million buyback authorization, reflecting management’s confidence in TDS’ fiber-first strategy.

Glossary

13F reportable AUM: Assets under management that must be disclosed in quarterly SEC Form 13F filings by institutional investment managers.
AUM (Assets Under Management): The total market value of investments managed on behalf of clients by a fund or institution.
Top holdings: The largest investments in a fund's portfolio, typically ranked by market value or percentage of AUM.
Outperforming: Achieving a higher return compared to a specific benchmark or index over a given period.
Dividend yield: Annual dividend payments divided by the share price, expressed as a percentage.
TTM: The 12-month period ending with the most recent quarterly report.
Broadband: High-speed internet access that is always on and faster than traditional dial-up connections.
Wireline telecommunications: Communication services delivered over physical cables, such as telephone lines or fiber optics.
IoT (Internet of Things): Network of physical devices connected to the internet, enabling data collection and exchange.
Value-added services: Additional features or enhancements offered beyond basic services to increase customer value or generate extra revenue.
Managed services: Outsourced management of a company's IT or network functions by a third-party provider.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.