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What's Wrong With This Picture
Even though Comcast's proposed $45.2 bilion acquisition of Time Warner Cable was scrapped by regulators a month ago, that deal at least made some sense: a bigger company was buying a smaller company. Over the weekend, the bigger M&A news, is that now another company will give the Time Warner Cable acquisition a try: John Malone's Charter Communications, which has agreed to buy TWC for $50 billion.
There is just one concern: before today's announcement, Charter had a market cap of $20 billion, less than half of Time Warner Cable's $48 billion. Or shown another way: a company with 6.3 million total subs is buying a company with 15.4 million subscribers. In other words, courtesy of ZIRP and massive leverage, telecom behemoths are now in danger of being consumed by relative dwarfs.
We'll pass comment on the fact that the share price of both companies jumped in response to the news. After all, even Citi figured out what is going on there.
As for the "synergies", expect the BLS to come up with its own set of "double seasonal adjustments" to compensate for the thousands of job "synergies" that are about to be unleashed.
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I don't want options, I need one entity to tell me what to think.
I have Charter, I feel my rates going up as I'm writing this.
The Clintons had leveraged call options on TWC, bought last week. All bought with "Clinton Foundation" funny money through Goldman Sachs.
Remember when TV used to be free? Now you pay to watch commercials and propaganda. Time to cut the cord.
Do it. I did a few years ago and after two months I no longer even missed it. There is almost nothing you cannot find (worth watching) elsewhere with minimal effort, and you'll be amazed at all the free time you suddenly have.
Is this the same Time-Warner that AOL bought? Right, what's wrong with this picture.
Hope rates don't change. I've lived a lot of places, so had all the different ISP's. After all that, my first question when I consider a new place is "Does it offer Charter?"
I'm now getting dependable 60MB/4MB cable web out on a lake in the wilds of Michigan for $39/month, free modem, no contract or "bundle". The installation guy said they're expecting to kick the basic service up to 100 MB.
What that says about their infrastructure, business model and prospects I don't know. But they offered this kind of service to people here who in most places wouldn't get anything but satellite and did it at a price like that with no competition at all.
Love my Charter service.
Gotta hope, of course, the FTC kaboshes the deal on anti-trust grounds, but if they don't it's the TimeWarner side of the new company I'd be worried about.
Bob, enjoy that $39 rate while it lasts - which is a one year promo rate, Then when it runs out, like mine did, you'll be paying $54.99/mo for standalone internet. Charter does not have a "standard" $39 rate anywhere in the USA, if you bother to look it up, you'll find out it varies from $49.99 to $59.99 depending on location. Good luck if you think the $39 rate will be extended past one year. As far as the service itself goes, I don't have any major complaints, they've removed usage caps and that's a plus, but I'm not happy about their lack of choice when it comes to speed. You either take the 30 (now 60) Mbps or 100. That's it. No choice at all. If they offered a 10 - 15 Mbps service for $30 - $40 a month, I'd be all over it. I don't need or want 60, it's more than I can use and I'm paying for something that's useless to me (personally, your situation may be different). I would like a choice for speed and there just isn't one. DSL isn't available in my city, so I really don't have any other choice for internet than Charter. They have a monopoly here. It sucks! (lack of choice, that is).
Look around at ALL the other ISP's and find even one that will give you a better deal. It ain't out there. You're suffering your Charter service in wretched isolation.
Share your router and split the bill with your neighbors if you feel like saving a few extra bucks.
I enjoy the headroom, but seems to me it can be enjoyed multiple ways.
What can I say. Alot of experience in a lot of locations, but on an isolated lake with literally no cell phone reception has now made me an apostle.
Bob is right, Cox Cable is $69 a month for roughly the same service you enjoy with Charter, its slightly slower on average, and we have a 250Gb monthly cap (they completely shut off my service at 250.01Gb).
Just be thankful you don't have Comcast.
Apparently dwarfs have big dicks too.
Dwarfs with feelings of grandeur, delusion
More misallocation of capital with monopoly money...
I love the smell of money in the morning. Ahhhh! It smells like, .... You know.
Viruses and Cancer do consume their larger hosts - sounds just like Wall Street!
Leveraged buy out .... LBO ... what's so hard to believe .... after all, 100 Zionists rule the universe !
Micheal Milken would be proud. Free money and no rules have turned the game into nonsense. And this is only one expression of it.
Buy it ... split it up ... sell parts off like an old auomobile.
Massively leveraged telecomm companies...we've seen this one play out before. These are the fucked up deals that I cut my teeth in cap structure arbitrage back in the early 2000's.
The toppy contrarian indicators just keep coming...
AOL buying TWC was the top of the last stock bubble. Welcome to the top, again!
cable tv. now there's an industry with a bright future.
Next up: Shake Shak buys Mcdonalds.
bls "dbl seasonal ajustment" sounds eerily like "dbl plus good" from
1984.
bls "dbl seasonal ajustment" sounds eerily like "dbl plus good" from
1984.
Nothing's wrong with this picture, you moron. Let's look at the structure of the deal.
Let's
Link?
Give it 5 years and Time Warner will probably be spun out.
Give it 10 years and Time Warner will probably be merged into something else.
Give it 15 years and Timw Warner will probably be spun out, etc etc.
It's a money laundering scheme.
The last time a merger this large was announced, the Trade Center in the U.S. fell over to provide liquidity.
Where have we seeen this before....oh yeah, in mega bank merger times.
hey buffet, is that you again?
The M&A gravy train driven by low interest rates and readily available "Oligarch-bucks" claims its latest trophy...Verizon/AOL, Comcast/TWC, WorldCom etc....yada yada
screw the stockholders !
as a Brighthouse consumer.. I'm.. displeased. worse service + higher rates to sevice the usury. fucking awesome?
My Theory Of The Day is that this deal is what powered the NDX stocks all last week. All of Wall Street was climbing on board, and now that they're all on the train (and the CEOs' bonuses are assured), it's time to return to the good old exponential moving average, which might mean TWC dropping from 178 to, say, 155. Just my guess. Time for Us Little People to get back in our Child Safety Seats.
Yancey's Fake Oil Company Inc. is announcing its intention to purchase ExxonMobil.