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Why Traders Are Piling Into General Communication, Inc. (GNCMA)

General Communication, Inc. (NASDAQ:GNCMA) shares have surged 62% after the company announced it has entered into a definitive agreement where Liberty Interactive will buy the General Communication through a reorganization. The transaction entails certain Liberty Ventures Group assets and liabilities to be contributed to General Communication, Inc. (NASDAQ:GNCMA) in exchange for a controlling interest in General Communication.

Specifically, investors of General Communication will receive total consideration of $32.50 per share comprised of $27.50 per share in GCI Liberty Class A common stock and $5.00 in newly issued Series A preferred shares, based on a Liberty Ventures reference price of $43.65.

CEO Ron Duncan said,

This transaction with Liberty Interactive brings GCI back full circle, as GCI was part of TCI until 1986. We couldn’t think of a better owner, and look forward to being the largest operating asset within GCI Liberty. We will continue to run the company with our focus on providing the best value for Alaska customers, offering opportunities for our employees and investing wisely in the Alaska market.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Of the 742 elite funds we track, 9 funds owned $20.02 million of General Communication, Inc. (NASDAQ:GNCMA) and accounted for 2.90% of the float on December 31, versus 7 funds and $14.15 million respectively on September 30.

The Bottom Line

General Communication, Inc. (NASDAQ:GNCMA) shares are higher today on the back of M&A with Liberty Interactive. For further reading, check out the article ‘10 Largest Telecom Companies in The World by Revenue’.

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