Market Overview

Otelco Tanks 40% on Time Warner Deal Expiration, Suspends Dividend

Shares of Otelco (NASDAQ: OTT) are seeing much pressure during Monday's trading session, after the company announced on Friday that its contract with Time Warner Cable (NYSE: TWC).

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.

Posted-In: News Dividends Contracts Events Intraday Update Movers

 

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