Frontier Communications Corp. (NASDAQ: FTR) had fallen as much as 9% since the company completed its reverse stock split of 1-for-15. Though it was initially thought the split might help remedy some short term, but with the working financials of the company in disarray, it doesn’t seem to be the end of Frontier’s fall.
Although Frontier is now relatively safe from delisting off of NASDAQ, the troubles remain. The company’s Q2 reports are expected in the beginning of August and investors are bearish in terms of the outcome. With an expected EPS of -$0.05, Frontier is expected to underwhelm again. In truth the company hasn’t been doing well, it has consistently posted negative income, its revenue continues to shrink and its key indicators are also showing signs of poor management. A ROE of -9.96 is not a sign of a healthy company, and unless something is done to restructure the core business operations in order to regain market share and find a foothold, the stock will continue to tank. But again, now that the reverse split has taken effect, management has more time to implement changes.
However, for right now, Frontier remains a good bet for investors looking for a profitable short as the subpar earnings and lackluster management will continue to hinder this company’s future.