Diameter Capital Sells All Telephone and Data System Shares
Key Points
The firm sold 1,067,297 shares of Telephone and Data Systems.
The fund no longer holds any shares.
The position represented 4.0% of the fund's AUM as of the prior quarter.
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On May 15, Diameter Capital Partners LP reported in a filing with the Securities and Exchange Commission that it sold out of Telephone and Data Systems (NYSE:TDS), disposing of 1,067,297 shares.
- Sold 1,067,297 shares of Telephone and Data Systems;
- Post-trade, the fund holds zero shares
- The position was previously 4.0% of fund AUM as of the prior quarter
What else to know
- Top holdings after the filing:
- NYSE: SPY (put): $325.2 million (30.4%)
- NASDAQ: SATS: $172.2 million (16.1% of AUM)
- NYSEMKT: IVM (put): $99.2 million (9.3% of AUM)
- NASDAQ: UNIT: $53.3 million (5% of AUM)
- NASDAQ: NBIS (1.25% cv bond): $38.5 million (3.6% of AUM)
Company overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $2.1 billion |
| Net income (TTM) | $338.6 million) |
| Dividend yield | 0.4% |
| Price (as of market close May 22) | $39.30 |
Company snapshot
Telephone and Data Systems is a diversified telecommunications provider with a national presence, operating through both wireless and wireline business units. Its strategy focuses on delivering reliable communications infrastructure and value-added services to sustain competitive positioning in the U.S. market.
- Provides wireless solutions, IoT connectivity, broadband, cloud TV, and voice services through the UScellular and TDS Telecom segments.
- Generates revenue primarily from wireless subscriptions, broadband and cable connections, and related device and service sales to consumers, businesses, and government clients.
What this transaction means for investors
The share sale represents a significant sale for Diameter Capital since the $43.4 million stake was the firm’s fifth-largest holding as of Dec. 31. Diameter’s current reportable portfolio, which includes equities, call and put options, and convertible bonds, totaled $1.1 billion as of March 31.
The firm’s sale comes as Telephone and Data System's shares have trailed the overall market, using the S&P 500 index and Nasdaq Composite as benchmarks. The stock returned 17.6%, including dividends, over the last year through May 22. During this time, the S&P 500 and Nasdaq Composite produced total returns of 30.4% and 41.5%, respectively
Telephone and Data System reported first-quarter results earlier this month. Revenue grew 7% year over year to $309.5 million. It also reported a profit from continuing operations under generally accepted accounting principles of $146.6 million, reversing a loss of $5.9 million from a year ago.
The company announced it offered to buy the remaining shares of Array Digital that it doesn’t already own in an all-stock transaction.
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Lawrence Rothman, CFA 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.
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