By Leah McGrath Goodman
Rarely has a stock so brazenly confounded the experts — while also placing them under its spell — as FairPoint Communications, a long-struggling, recently bankrupt telecommunications company in Charlotte, North Carolina.
|Illustration: Joe McLaren|
Since emerging from bankruptcy in late January, FairPoint has shed more than four-fifths of its value, falling from about $25 to below $4 a share before staging a rebound in October above $6, amid talk of another bankruptcy. This has occurred even as its newly installed management makes demonstrable strides and firms such as Paulson & Co., Anchorage Advisors and Angelo, Gordon & Co. aggressively throw their weight behind it. In any other world, a formerly bankrupt company that successfully stepped back from the precipice would see improvement in its stock price. Not so with FairPoint.
“Yep, it’s [expletive] the bed,” says a managing director at Angelo, Gordon, the largest holder of FairPoint stock among the company’s...