Tag Archives: chtr

Charter Stock Falls; Digital Realty Up On S&P 500 Add, Equinix Deal

Charter Communications ( CHTR ) stock fell Monday after the soon-to-be No. 2 cable TV firm was not added to the S&P 500, as some analysts and investors had expected, following the final approval of its Time Warner Cable acquisition. Standard & Poor’s announced late Friday that Digital Realty ( DLR ), a data center operator whose stock has been rising of late, would replace Time Warner Cable in the S&P 500 . Digital Realty will take TWC ‘s place on the index after the close of trading on Tuesday. Charter expects to close its purchases of Time Warner Cable and Bright House Networks on Wednesday, after gaining the final regulator OK on Thursday. It will then become the No. 2 cable company, behind Comcast ( CMCSA ). Equinix ( EQIX ) early Monday announced that it will sell eight European data centers to Digital Realty for $874 million. Regulators required Equinix to divest some assets in approving its acquisition of Telecity. The eight data centers consist of five in London, two in Amsterdam and one in Frankfurt. Shares of Digital Realty, which announced an equity offering to fund the Equinix deal, were up 2.5% early Monday, near 96 and touching an all-time high for the sixth day in the past eight trading days. Digital Realty stock is up 25% this year. Equinix stock was up a fraction early Monday. Charter stock was down nearly 4% in early trading in the stock market today , near 206. California regulators last week approved the Time Warner Cable ( TWC ) deal, the final hurdle to Charter’s makeover. Liberty Broadband ( LBRDA ) will own about 18% of the new Charter, while privately held media firm Advance/Newhouse will own about 13.5%.

Comcast Could Gain In China With DreamWorks Acquisition

Amid growing regulatory headwinds on the cable TV side of its business, Comcast ( CMCSA ) might again build up its content side by acquiring movie studio DreamWorks Animation ( DWA ). DreamWorks stock surged 17% in afternoon trading on the stock market today on multiple reports that Comcast is in talks to acquire the movie studio. Comcast did not comment on the DreamWorks speculation during its Q1 earnings conference call early Wednesday. Comcast posted Q1 earnings and revenue that topped views, as the cable TV firm added 53,000 video subscribers. Comcast owns NBCUniversal, where filmed entertainment revenue slipped 4.3% in Q1 vs. the year-earlier quarter, after surging 46% in 2015. Comcast is in talks to pay $3 billion or more for DreamWorks, according to reports in the Wall Street Journal and other media outlets. Aside from producing movies, DreamWorks has been creating original content for Web video streamers Netflix ( NFLX ) and Amazon.com ( AMZN ). DreamWorks owns AwesomenessTV, which develops shows for millennials, young adults ages 18 to 34. Verizon Communications ( VZ ) in early April acquired a 24.5% stake in AwesomenessTV for $159 million. One looming question is whether Verizon and its content partner Hearst hold rights to buy the remainder of AwesomenessTV if DreamWorks is sold to a competitor such as Comcast. “We have not made the terms of the agreements public,” a Verizon spokesperson told IBD. DreamWorks’ most popular movie franchises include “Shrek,” “Kung Fu Panda ” and “ How to Train Your Dragon.” There’s optimism, analysts say, for the upcoming “Despicable Me 3” and “The Secret Life of Pets.” DreamWorks has expanded into China, a key market for Comcast.  NBCU’s “Fast and Furious 7” movie last year grossed $400 million at the box office in China. Comcast, DreamWorks Both Building In China With Local Investors Comcast-NBCU is building a $3.3 billion theme park in Beijing with local investors. It’s slated to open in 2019. The Oriental DreamWorks movie studio, meanwhile, is building a new headquarters and entertainment center in Shanghai with local partners. While not commenting on interest in DreamWorks on Comcast’s Q1 earnings call, NBCU Chief Executive Steve Burke said that China “represents a big, big opportunity for the company.” “It already is a significant profit generator,” Burke added. “I think we’re doing all the things that you would expect us to do. (We) have a lot of big movies coming out in China in the next year and want to make sure that we’re doing everything we can to grow that market as aggressively as possible.” Comcast acquired NBCU from General Electric in 2011. For Q1, Comcast said cable TV revenue climbed 6.7% to $12.2 billion, while NBCU revenue rose 3.9% to $6.86 billion. NBCU’s theme park revenue jumped 57% to $1.02 billion. Comcast stock was up a fraction Wednesday afternoon, above 61, and it’s risen nearly 9% in 2016 despite facing regulatory headwinds. Cable TV firms have been squabbling with the Federal Communications Commission over broadband privacy issues as well as the agency’s plans to open up the set-top box market  to more competition. The Department of Justice on Monday cleared  Charter Communications ’ ( CHTR )  purchase of Time Warner Cable ( TWC ), and the FCC moves closer to granting its approval. Charter would be the No. 2 cable TV firm, behind Comcast. Charter will not be allowed to impose usage-based pricing or data caps on broadband customers for seven years as part of proposed conditions on the TWC deal. Whatever conditions Charter agrees to might set the bar for Comcast down the road, analysts say. Regulators thwarted Comcast’s acquisition of TWC in April 2015. Some analysts speculate that Comcast could buy a wireless firm, such as T-Mobile US ( TMUS ), if mobile video competition heats up. Comcast has filed to be a possible bidder in a government auction of radio spectrum owned by local TV stations that began in late March. Comcast said that its Q1 earnings, excluding items, rose 7% from the year-earlier quarter to 87 cents per share, while revenue increased 5.3% to $18.8 billion. Analysts had modeled EPS of 79 cents and revenue of 18.64 billion. Comcast’s video customer additions represent a swing from a loss of 8,000 in Q1 2015. It marked its most video subscriber additions in nine years. Comcast added 438,000 broadband subscribers, up from 407,000 in Q1 2015.

Charter-Time Warner Cable Deal Gets Regulatory OK, Netflix A Winner

The Justice Department approved the Charter Communications ( CHTR ) takeover of Time Warner Cable ( TWC ) and Bright House Networks after the cable giants agreed to concessions that should benefit Netflix ( NFLX ) and other streaming media. Federal Communications Commission Chairman Tom Wheeler also backed the deal. The FCC will likely approve the combination soon. After that, California regulators would pose the final hurdle for the merger. They are expected to approve it in a vote next month. As part of the deal, Charter will expand the number of homes with broadband access by 2 million, including 1 million with another high-speed provider, Wheeler said. Netflix has endorsed the deal, based on Charter’s pledges. Charter agreed to not impose data caps or tie Internet rates to usage. Charter also won’t be allowed to sign deals with content providers to make it harder for Netflix and other streaming services to get content. Charter said last year it would have some 23.9 million cable and broadband customers in 41 states, with big gains in Los Angeles and New York. It would be the No. 2 broadband operator after Comcast ( CMSCA ). Charter Communications in May 2015 agreed to buy Time Warner Cable for $55.1 billion and Bright House for $10.4 billion. That followed the collapse of Comcast’s planned Time Warner Cable buy due to regulatory objections. Charter Communications stock rose 4.6% to 207.01 on the stock market today , with Time Warner Cable climbed 4.1% to 209.83. Netflix fell 2.4% as shares still reel from last week’s weak subscriber outlook. Comcast fell fractionally. Related: How Charter Broadband Conditions May Set Bar For Comcast