By Mark Scott
Williamsville, NY – Will a new week change the fortunes for Adelphia Communications? One local financial analyst says not unless Adelphia management begins answering questions about its debt.
Adelphia stock closed at $7 a share Friday. In early trading Monday, the share price was up 37-cents to $7.37.
Since word first surfaced nearly three weeks ago of the company's debt problems, Financial Analyst Anthony Ogorek says Adelphia shareholders have lost a combined $3.5 billion.
"There is only one thing that can pull Adelphia out of its debt spiral," Ogorek says, "and that is the company coming forward with its annual report that explains and puts into perspective exactly what the true leverage is."
Last week, Adelphia announced it's retained three investment bankers to advise the company on the sale of some of its assets. But if the stock slide continues, Ogorek warns Adelphia may not be able to raise enough capital.
"At this point, it's getting to be exceedingly difficult to understand how they expect to have any kind of asset sale where they're going to raise any kind of money," Ogorek continued. "Everybody knows what happened to the stock. They'll have to offer assets at fire-sale prices."
Ogorek says Adelphia could be reaching a point where its fate will be out of its hands. Class action lawsuits continue to mount against the company, accusing management of misleading investors.