- The stock remains attractive (despite the ~30% gain since initiation) as the original investment thesis continues to play out.
- The FTTC business received a huge boost after Project Ark went live last month; the (realistic) long-term $70 million revenue run rate is 3.5x the 2014E.
- The value of the embedded takeover option increased after the company reportedly hired Wells Fargo to help with a potential sale last week.
- An acquirer could easily pay 10x EBITDA, which is above the current 7.8x multiple, but below the 12.8x Level 3 paid for TW Telecom four months ago.
- A potential spin-off of legacy assets into a REIT is a higher-probability event than implied.