Update 2:55pm: Adds background on Gamco’s previous interactions with TDS and Us Cellular.
Telephone and Data Systems (NYSE:TDS) rose 4% after investor Gamco said it’s considering nominating directors at the next shareholder meeting.
Gamco, run by famed investor Mario Gabelli, owns 4.5 million shares of TDS common stock for its clients, according to a letter Gabelli sent to the CEO of TDS on Thursday. The stake makes Gamco among the top 10 holders of the company. TDS shares have plunged more than 60% over the past year.
“With the current collapse of the stock, we need to again examine what is the appropriate allocation of capital and how to grow the intrinsic value and allow it to surface,” Gabelli wrote in the letter.
“While we have reviewed suggestions on numerous occasions in the past, we will bring these to the table again in light of the extraordinarily poor performance and the lack of focus as a result of TDS’ ownership of US Cellular and other dynamics,” Gabelli added.
Gabelli’s letter to TDS comes after he’s unsuccessfully tried to convince the Carlson family, which controls U.S. Cellular (USM), which is majority-owned by TDS, to sell in the past. Gabelli thought he was close to persuading the USM Chairman LeRoy Carlson Jr. to sell the company in 2017, only to be rebuffed in his effort, according to a NY Post report at the time. Gamco owns about 1.9 million USM shares. US Cellular (USM) rose 2.4% on Friday.
The NY Post report in April 2017 also indicated that Verizon (VZ) made a $100 bid for TDS (TDS) in late 2007 that was rebuffed.
Telephone and Data Systems (TDS) recently held its annual meeting on May 18.
TDS short interest is 5.2%.