LICT Spinoff Notes

May 16, 2023 Update

LICT Corporation (LICT) is a telecommunications company. It has built a robust network infrastructure that allows them to deliver high-speed internet and data services to businesses and residents in underserved and rural areas. This has helped to bridge the digital divide and bring critical services to areas that were previously without access.

On May 3, the company announced that it still expects to spin-off its Michigan subsidiary early in the third quarter (I missed the previous announcement). Apparently, LICT has been quite the spin-off machine. From the press release: “Shareholders of LICT have benefited through spin-offs. CIBL, Inc., spun off in 2007, initially traded beginning in 2008 at around $200 per share; it has recently traded as high as $1,800 per share. Likewise, ICTC Group, Inc., spun off in 2010, initially traded at around $15 per share and was acquired in 2018 for $65 per share. Indeed, LICT was itself a spin-off from Lynch Corporation and started trading at $2,500 per share. The spin-off of our Michigan subsidiary is in the final stages, with projections for an early third quarter distribution.”

I don’t fully understand the rationale for the spin-off because as I understand it, LICT has one focus: providing high-speed internet and data services to businesses and residents in underserved communities. But perhaps there is a benefit from having a separate business in different locations (for example, Michigan, in the latest spin-off) due to local rules and regulations.