Tuesday, November 10, 2015

Verizon Communication To Sell Its Assets



The telecommunication company has decided to sell of its assets in order to stick to and focus on its core activities.

Verizon Communication Inc.’s enterprise assets are worth $10 billion which the telecommunication company is looking to sell. The reason for this sale is that the company wants to maintain its main focus on its core activities and do not want to deviate from their core product. Their business previous known as MCI is the one the company will be letting go of.
MCI mainly deals with landlines and internet services for several clients and large businesses. These are business that directly compete with Alphabet and Amazon and has faced immense competition from them. The company has however tried to keep up with the competition in the market and have struggled to do so. It has been a great struggle for them to keep up with all the advancements in the cloud computing and price competition that the others have given.
A number of analysts and people following the company believe that it is a smart move by the company as it is better to keep their main focus on the company’s core function of wireless segment rather than move towards other things. Sticking to their core product will help them not only gain the maximum market in that but also become the best in it. By doing so, the company will be able to compete efficiently with the others in the market.
Furthermore, this has not been easy for the company to do as after the announcement of this decision the telecommunication company did mention that it will be quite a difficult process and task to separate the assets of the company and the buyer, whoever it maybe, will need to sign commercial proceedings  which again will be very time consuming. A comment received by the company was that as of right now they are still working on a more structural and easy process to go forth with the sale of the assets.
A potential buyer of the assets of Verizon is Century Link who has shown interest in buying the company’s assets and even had a few negotiations with the telecommunication company earlier this year. However, Century Link has not further commented on this matter. The telecommunication company is however getting rid of the assets that are not connected to its core activities.
The company announced the sale of its residential landline assets to Frontier Communications in February 2015 for $10.54 billion. The latter company is likely to get an expansion opportunity and a platform to boost its sales through this acquisition, provided that it happens. Further, the company also sold it tower portfolio for a price of $5 billion.
Currently, Verizon stock is being traded at a share price of $45.78. At the closing on Friday, the stock price traded down by 0.91%. The 52 week high reported by the company was $51.73 while a 52-week low was also reported by the company, which was of $38.06. Currently, the market capitalization of  Verizon is $186.27 billion.

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