Late Rally Boosts Adelphia Shares

1/04/2004 7:00 PM Eastern

Investors were betting last week that Adelphia would emerge from bankruptcy in 2004 with the ability to at least throw a bone to its equity holders, driving the stock up by more than 66% (26 cents) in the days leading to Dec. 29.

The MSO, which filed for Chapter 11 bankruptcy protection in June 2002, is expected to emerge from bankruptcy in the second half of 2004. With a new management team and a $1.5 billion debtor-in-possession financing secured last year, Adelphia is poised to come out of bankruptcy with rebuilt plant and a new focus on growing subscribers.

Trilogy Capital Partners principal Oren Cohen said last week the run-up likely was a bet that equity holders will at least get some relief after Chapter 11.

"As people move toward a workout and you start determining what the values are, people start getting a little bit hopeful that there might be some bread crumbs left over for preferred holders or even equity," Cohen said.

Cohen added that buying the stock is still highly speculative, but some analysts have valued Adelphia at as high as about $3,500 per subscriber post-bankruptcy.

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