Otelco Tanks 40% on Time Warner Deal Expiration, Suspends Dividend
Time Warner Cable indicated that it will not renew its existing contract for wholesale network connections provided by Otelco. The contract in question represented approximately 11.7% of Otelco's consolidated revenue for 2011.
This contract expires on December 31, 2012 and includes a transition period into 2013.
As part of its response to this development, the Board of Directors has decided to suspend dividends on the common stock portion of Otelco's Income Deposit Securities effective immediately.
Currently, shares of Otelco are trading down over 41% at $7.09 per share. Shares are down over 48% year-to-date.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.