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GTT Communications, Inc. (GTT)

NYSE - NYSE Delayed price. Currency in USD
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4.4100-0.2900 (-6.17%)
At close: 4:00PM EST
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  • Y
    Yahoo Finance Insights
    GTT is up 10.37% to 4.41
  • H
    GTT filed an 8-k disclosure with the SEC on Wednesday after market close... can anyone explain, in plain english, what it means.... please see link below. I am long the stock so curious
    Inline XBRL Viewer
  • s
    This will go back to $15 a share in no time....Buy..Buy..Buy
  • t
    This is pushing Frontier territory. Employees should get out now, and end any contributions to esop.
  • G
    SEC filing with various updates

    Positives: Confirms due diligence is in progress on $2.15B asset sale and puts scope around accounting review, with likely no impact to revenues or cash flows.

    Negatives: GTT stated it is unlikely to file updated financial statements before deadlines required by multiple lenders (end Oct/early Nov) so will have to beg for extensions to avoid default.

    Have to hope lenders have enough faith in the “no impact to revenues or cash flows” assessment to grant the extension. Talk about skating on thin ice!

    I’ve no idea how likely those extensions are, but it doesn’t seem creditors would have reason to force GTT into bankruptcy if there isn’t actually a liquidity issue. Anyway, will make for an interesting trading day ahead.
  • W
    3.7B debt, 2.15B sold.
  • T
    The trend is NOT your friend. I've been watching GTT for 2-3 years and TIMBER!
  • K
    Big news next 24 hours
  • X
    Can anyone provide a reason why I should buy GTT?
  • g
    I started following "lionstock-aletrs” (Gooogle it - off course without any space or dash in between the words) and their notifications are better than anyone else.
  • I
    [continued from the previous post]

    A final linchpin of Mr. David’s thesis of a broken model is his view of GTT executive compensation. He claims that the senior executives received over $37 million over the last two years. However, what he fails to mention is that these figures relate to non-cash compensation that is tied to performance. When looked at in this light, this method of compensation puts the focus of the top executives in the right place from an investor’s perspective.

    In fact, the top executives have put together a very strong set of assets and services in a very dynamic industry. The reality is that even if this company turned out to be a slacker for the next 5 years with a series of small acquisitions totaling $100M a year and with 400 sub-par quota-bearing reps averaging sales of $8000 in new revenue per month, it would still double in size. However, a more likely scenario is that it will triple in size in those five years, including having 500 reps averaging $10,000 a month in new revenue. The latter sort of performance is what the Ortega hire is all about.

    Dan David’s bottom line is that: “The main problem is that GTT does not generate organic growth or enough free cash flow to service its debt”. As shown above, he is wrong about the free cash flow. And, if he knew anything about the industry, he would know that many communications growth companies hit tough sales patches and then recover very nicely. It just takes one sales and marketing program/contest around one hot product such as SD-WAN to turn the tide.

    In short, Dan David took a big swing at GTT and history will show nothing more than a big whiff.

    Steve Zecola (MCI: 1983-1994)
  • f
    Wall Street analysts see GTT Communications reporting a quarterly loss of 39 cents per share on sales of $290 million.

    ActualRevenue of $326.8M (+71.9% Y/Y) beats by $36.76M.

    Higher loss due to one time charges for M&A.

    (Interroute acquisition provides scale in large market and opportunity for $100M in synergies which will help ebitda, margins,all metrics)
  • K
    GTT Communications (NYSE:GTT) senior VP and corporate controller, and principal accounting officer, Mr. Daniel M.
    GTT Communications (NYSE:GTT) senior VP and corporate controller, and principal accounting officer, Mr. Daniel M.
  • I
    With GTT’s stock price under $20 per share, I couldn’t help but take a look at Dan David’s (founder, Wolfpack Research) recommended short on GTT. Not surprisingly, he missed the big picture and most of the relevant details, as described below.

    When It comes to investing, equity investors rely heavily on the leader’s (and management team’s) industry experience. Without it, it’s hard to get people to take your pitch seriously. On the short side of equity investing, you would think that industry knowledge would also be a requirement. But Mr. David has no experience in Internet Protocol (IP) technologies or services or even anything remotely resembling them. He spent about 12 years at Finlay Enterprises (including a stint at Lord and Taylor) and about the same amount of time at GeoInvesting, which he founded. More recently, he was the Republican nominee for Congress in Pennsylvania's 4th Congressional District.

    In contrast, the CEO of GTT has a stellar industry reputation at several top flight telecom-related companies. In fact, he worked for me at MCI. When I left MCI to raise money for wireless. I was told that Orville Wright (then, COO) had given my performance at MCI an A+ to an inquiring venture capitalist. In turn, I would similarly rank Calder as an A+. One would be hard-pressed to find many executives in the communications service industry with a better record of performance.

    In fact, Mr. David said he invested in GTT seven years ago. If so, he would have known that the Motley Fool published a report last year listing GTT as providing its investors with the third highest return of all publicly traded companies over the previous ten-year period.

    Is Mr. David’s thesis anything more than “what goes up must come down”? He claims so, but he gets the facts and analysis wrong.

    First, Mr. David takes umbrage of the use of Adjusted EBIDTA, and says that how the financials are adjusted can have a big impact on the value of the company. He implies that GTT provides a lack of visibility. However, GTT’s adjustments are quite visible on their website. For example, GTT’s projected 2019 Adjusted EBITDA is $489M, including such items as “severance, restructuring and other exit costs” ($11M), “transaction and integration costs” ($36.9M) and “non-cash compensation” ($34.5M). Mr. David should recognize that knowing this information provides for a better forecast of 2020 financial results because these line item expenses will not affect GTT’s cash flows in 2020. And, of course, future cash flows are what drive valuation.

    What about the future? Mr. David claims that GTT has hit a brick wall on growth and will go bankrupt unless it achieves organic growth.

    Going back to the facts, GTT has posted $1.8 B in annual revenue over the last twelve-month period. In the last quarter, its cash flow margin was 27% and it was on a discernible path to 30% margins.

    Of course, claims of impeding bankruptcy implies the lack of ability for GTT to pay off the debt. However, even if GTT’s revenue stays flat over the next 5 years, its free cash flow after capital expenditures AND interest payments AND repayment of matured debt will be positive over that five-year period given a very gradual increase in productivity and margin expansion (which is implied by past performance). All of these numbers are available on its website under the link GTT Investor Presentation
    Having said that, why in the world would anyone think that this industry will not grow or that GTT will be losing market share?
    One does not need to be a communications expert to realize that the number of communications applications, the amount of data per application, the transition of voice circuit switching to VoIP, the transition of legacy multipoint private line networks to IP networks, the explosion in mobile usage, the continued growth of e-commerce, and the introduction of Artificial Intelligence into the world of Big Data means that the IP communications industry is exploding.

    Will GTT lose market share to the behemoths of AT&T and Verizon? The reality is that GTT is not on their radar screen. Even if they could capture 50% of GTT’s revenue through a concerted effort, that level of effort would be better spent by growing the market. For example, when you operate in industries where the CEO has circles on his/her whiteboard containing hundreds of billions of dollars, you can expand the market by less than 1% and get more revenue and profit than taking 50% of GTT’s revenue. And, of course, the mention of potential antitrust action against the Big Two often thwarts threatening behavior.

    [continued in the next post]
  • B
    CITIC Telecom (China) is licking their chops at this share price. They were supposedly interested in Interroute for 2 B. Now they could get Interroute and GTT for less than 2 B? Shorts are taking GTT to the woodshed, but creating some very interesting opportunities?
  • f
    GTT shares have over 35% upside potential, says Jefferies Jefferies analyst Scott Goldman believes that with the acquisition of Interoute, GTT Communications has become a "much more formidable enterprise player that continues to gain recognition on a global scale." The analyst views concerns over leverage and organic growth as short-sighted and continues to like the shares at current levels. He sees more than 35% upside potential to his $62 price target and keeps a Buy rating on GTT Communications.
  • f
    KeyBanc Reiterates Overweight on GTT Communications (GTT) After Updating Estimates
    $57.00 price target
  • n
    Didnt I tell you that it would hit 40 by the end of the week? :-)
  • V
    bottom was found, 50 percent retracement to pre-drop levels will be quick then the steady climb begins...just watch.
  • r
    can someone give a recap of the reason behind the price drop?