Tag Archives: nflx

Comcast, Charter, Altice Cable Swaps Eyed After Deal Approvals

Charter Communications ( CHTR ) is moving closer to gaining federal regulators’ approval for acquiring Time Warner Cable ( TWC ) — a deal that could set the stage for assets swaps among cable TV firms, including  Comcast ( CMCSA ), analysts say. The Federal Communications Commission reportedly is set to greenlight the Charter-TWC merger, with conditions, though the deal is still being studied by California’s state regulators. Charter stock rose to just shy of a record high on the report. Regulators thwarted Comcast’s proposed purchase of TWC in early 2015. Europe-based Altice Group , however, expects to gain approval for its purchase of Cablevision Systems ( CVC ) in May, the company said. Altice earlier acquired Suddenlink Communications. If both the Charter-TWC and Altice-Cablevision deals sail through, cable TV firms are likely to explore asset swaps of cable systems in different markets, says a Barclays research report. “Post the completion of pending cable deals, there is some likelihood of potential asset swaps between the remaining distributors to align footprints more closely and extract more in synergies,” said Barclays. “While the regulatory push-back is fair to consider in this instance, we note that the FCC has concluded in the past that pro-competitive effects of clustering of cable systems tend to outweigh the negatives.” Even if the FCC approves the Charter-TWC merger, California’s OK might not come until late May, analysts say. Charter also plans to buy privately held Bright House Networks. Netflix ‘s ( NFLX ) support has smoothed the path for Charter’s deals, analysts say. Both TWC and Cablevision offer services in the New York City area, a big market. RBC Capital says the FCC might still be opposed to any sizable acquisitions by Comcast, the nation’s No. 1 cable TV firm. Comcast also owns NBCUniversal. “Comcast would be unlikely to be allowed to acquire a major cable firm or programmer, but could acquire long-distance assets, a wireless operator, or could engage in clustering and swaps with other cable operators,” RBC analyst Jonathan Atkin wrote in a recent research report. Charter stock rose 6% in the stock market today , to 198.16. Charter peaked at 199 last March. Time Warner Cable stock rose 3.3% Wednesday.

Redbox Owner Outerwall Doubles Dividend, Explores Possible Sale

Automated retail kiosk operator Outerwall ( OUTR ), parent company of Redbox and Coinstar, late Monday doubled its quarterly dividend and said its board is exploring “strategic and financial alternatives to maximize shareholder value.” Outerwall has been under pressure from investment firm Engaged Capital of Newport Beach, Calif., to take action to improve its value. On Feb. 18, Engaged Capital, which owns 14.6% of Outerwall’s shares, sent a letter with its recommendations to the company’s directors. Those recommendations included exploring a transaction to take the company private. Engaged also said Outerwall needs to better manage its cash and cut costs. It recommended discontinuing share repurchases, paying down debt and increasing its dividends. Further, it said Outerwall should shut down or sell its struggling ecoATM business, which buys and resells used smartphones and tablets. After the market close Monday, Outerwall issued a press release saying that it has retained Morgan Stanley as its financial advisor and Perkins Coie as its legal advisor in exploring alternatives for the Bellevue, Wash.-based company. Outerwall also raised its quarterly dividend to 60 cents a share from 30 cents a share. Outerwall stock jumped 9% in after-hours trading. In the regular session Monday, Outerwall stock rose a fraction, to 34.39. Shares have plunged nearly 60% since touching a record high in July. “The increase of our quarterly dividend to this sustainable level, and the decision to explore strategic and financial alternatives both clearly demonstrate that the Outerwall board of directors and management team are committed to acting in the best interests of the company and all shareholders,” Outerwall CEO Erik Prusch said in a statement. “The board and management team will evaluate all options thoughtfully and carefully with the support of our advisors. “Throughout the review process, Outerwall will remain focused on executing on our operational plans, managing our businesses for profitability and cash flow, and continuing to align costs with revenue to create operational efficiencies, while returning significant capital to our investors.” Challenging fundamentals for Outerwall could a roadblock to big strategic moves, Dougherty analyst Steven Frankel said in a research report Monday. He rates Outerwall stock neutral. “While we applaud management’s willingness to explore its strategic alternatives, we expect the process could be hamstrung by the material fundamental challenges that the company faces,” Frankel said. “Redbox continues to face stiff headwinds from box office volatility, the shift in consumer viewing toward episodic TV and the ubiquity of streaming, while ecoATM looks to us as a sub-scale business challenged by Apple ( AAPL ) and the carriers’ more aggressive push to repurchase old devices.” Redbox is being challenged by consumers opting more to use streaming services like Netflix ( NFLX ) and video-on-demand offerings from their pay-TV providers. RELATED: Redbox Faces Hit From Accelerating Shift To Streaming Video  

Netflix Backing Could Pump Up Google Cloud Vs. Amazon.com AWS

Could video streamer Netflix ( NFLX ) give Alphabet ’s ( GOOGL ) Google a boost in its cloud computing war vs. Amazon Web Services? Morgan Stanley speculates that may the case when Netflix pops up at Google’s cloud computing user conference slated for March 23-24. While Netflix is a customer of AWS, part of e-commerce giant Amazon.com ( AMZN ), it also uses Google’s IaaS (infrastructure-as-a-service) platform. “Non-Google guest speakers at the conference include Snapchat, Spotify . . . and Netflix,” Brian Nowak, an analyst at Morgan Stanley, wrote in a research report.  “ Snapchat and Spotify are current Google Cloud users. While Netflix is a large AWS client, we believe Netflix uses Google Cloud for back-up storage. “Any endorsement and/or further Google Cloud adoption from Netflix would (help) Google Cloud establish its credibility as a competitor to AWS.” AWS is the biggest cloud services provider — where customers rent computer servers and data storage systems via the Internet — followed by Microsoft ( MSFT ) and Google. Goldman Sachs recently speculated that Google could announce price cuts at the user conference, where the new boss of Google’s cloud business, Diane Greene, will make her debut. Greene is the founder and former CEO of VMware ( VMW ), whose virtualization software is a staple in cloud data centers. One question for Alphabet shareholders, says Nowak, is whether Google’s capital spending on cloud infrastructure — data centers packed with servers and communications gear — will increase. “We expect (industry) cloud-related data center spending to grow 18% in 2016, up from 15% in 2015, and Google is a key driver, contributing one-fifth of the acceleration,” Nowak wrote. Image provided by Shutterstock .