Windstream's market cap is $7 million, while KEIP is worth $20 million. That's 2.85 times the total equity value of the entire company. How in the world are the id–ts who bankrupted the company due to their complete and total ineptitude (or arrogance in thinking they could get away with it) worth this? The average employee would be let go for far less and these unabashed imbeciles effectively get bailed out. All KEIP does is make them all whole on their stock losses before they make a grand exit. TT isn't qualified to run a Taco Bell. The entire company has been gutted of any useful talent, and remaining managers are bobble-heads acting as a conduit for the terrible decisions coming down from above whilst continually providing a positive feedback loop toward the top, making things far worse because the mo–ns handing down edicts get the impression that all of the decisions they've made are great. In reality, they reduce the chances of a Windstream turnaround every day they come into work. Windstream is done. Employees lose, customers lose, shareholders lost, executives get paid. End of rant.
7 replies (most recent on top)
It's not stealing, "just part of that chapter 11 process" TT
Absolutely correct about laying people off while still trying to exit so many sites in effort to break leases using CH11 rules. I am one of those left behind engineers trying to keep this c-ap going. I would be stupid to try very hard considering Windstreams management's actions. The unbridled nepotism is also tough to deal with on a continuing basis. One of the worst ran companies EVER!!!!
They need to consolidate all those Central Offices and Verizon collocation spaces. They have layers of CLEC network everywhere. In these telecom hotels that have multiple central offices all operating independently. In the verizon buildings you have 3-5 CLEC cages/scopes. Not one of them carrying enough traffic to justify it being open. But they laid off all their engineers and net tech. They literally do not have the man power or skill set left to attempt these projects
"I hope there is a buyer with the financial backing to buy this mess cheap and get it making money for a change. "
That's the role that Elliott Management appears to be aiming at. Buy it cheap (in this case, buy debt at a deep discount with the idea that it will become stock), clean up the company, get it making money, then sell it.
Elliott won't own the company lock, stock and barrel - just a big enough chunk to call the shots. Even just a 20% block could give them that clout if there were no other big holders to counter them.
The debt holders will get a mix of stock and new bonds at the end of chapter 11. The old Windstream stock has already been declared worthless. The new stock will start trading on the market. A lot of it will change hands in the first month or two.
There are a couple of negative possibilities to consider:
• Elliott's plans could change and they might decide to punt on this plan
•• In that case, they'd just start selling off their new stock and bonds when the bankruptcy's over
• They could proceed with their plan but then screw it up
Elliott wouldn't micromanage the company. Elliott would dominate the creditors' choice of the new CEO and maybe one or two other top people. Then the new CEO would pick the new executive team who'd start pruning and rebuilding the business.
Elliott seems pretty sharp. There have been a couple of earlier layoff.com threads about them and how the new regime might operate.
They've been making waves at AT&T also.
It’s too bad because IF WS had actually had a plan and focused on cost cutting, network modernization and realistic customer growth that doesn’t involve literally giving services away to make quarterly subscriber growth numbers, WS would have at least had a chance to go out fighting. The business as usual spin was laughable. Unless one is usually in the business of failing spectacularly that is. Then maybe it’s accurate. I hope there is a buyer with the financial backing to buy this mess cheap and get it making money for a change. WS is spending other people’s money like there’s no tomorrow. Business as usual again right boys?
These executives will be replaced as soon as they emerge from ch11. The whole basis for the KEIP was to incentivize them to stay through the process and not jump ship early. They know this is the deal. They are essentially getting their severance paid out over time vs a lump sump plus a bonus for sticking around. When Elliot takes the reigns they will restructure in anyway they see fit. Which will be slash and burn in order to recoup $ in the short term and then maintain a bare bones operation to stabilize and milk the existing revenue until they can turn the ship.
TT reached out to the consultants they stated " 60% of the time, it works every time"