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Thu, Jan. 28, 12:59 AM
- On Jan. 23 the New York Post reported that Verizon (NYSE:VZ) made an $8B bid for Yahoo's (NASDAQ:YHOO) core business.
- Bob Varettoni, director of corporate communications for Verizon, told CTFN tonight the rumors are false. "The New York Post was wrong. We've made no offer to acquire Yahoo."
- Yahoo reports earnings on Feb. 2.
- Note: Reuters: Yahoo to wait for earnings for strategic steps (Jan. 21)
- More than 1/3 of Yahoo's workforce has left in the last year (Jan. 10)
- Verizon, Yahoo And Best Idea For 2016 (Jan. 6 2016)
Dec. 8, 2015, 3:43 PM
- Backing up his CFO's comments at the UBS investor conference yesterday, Verizon (NYSE:VZ) chief Lowell McAdam today confirmed the carrier would explore buying Yahoo's (NASDAQ:YHOO) Internet business if it decided to sell.
- “We’d look at it like anything else,” McAdam said, while noting it's still not clear what Yahoo's board has planned.
- Verizon is one of many telecom/media firms linked (by the companies themselves or analysts) to a possible purchase of Yahoo's core; In Verizon's case, there's some strategic fit in Yahoo's content and tech business (like ad-tech company BrightRoll), though also hurdles (the biggest being the tax implications of Yahoo's Alibaba (NYSE:BABA) stake).
- Previously: Verizon expresses interest in Yahoo (Dec. 07 2015)
- Previously: Media companies linked to circling pack around Yahoo Internet business (Dec. 02 2015)
- Related: Verizon-Yahoo Tie-Up? (Dec. 08 2015)
Dec. 7, 2015, 9:14 AM| Dec. 7, 2015, 9:14 AM | 27 Comments
Dec. 3, 2015, 3:31 PM
- Frontier Communications (FTR -0.5%) has won its approval from the California Public Utilities Commission for its $10.5B acquisition of Verizon's (VZ -1.3%) wireline operations in the state.
- It had gotten a favorable signal from the PUC early last month. Frontier has received the other approvals for its takeover of the operations, which include telephony, broadband and video considering the included FiOS network.
- CEO Daniel McCarthy said the company was looking forward to the finish, now expected by the end of March: "We will transition our revenue to a more diversified mix, improve our growth prospects, create sustainable value for our shareholders and provide a great experience for our new Frontier customers in California, Florida and Texas."
- Previously: Frontier Communications +2.4% as California wireline purchase moves ahead (Nov. 09 2015)
Dec. 2, 2015, 9:42 PM
- While speculation about buyers for Yahoo's (NASDAQ:YHOO) core Internet business is focused on private equity, Yahoo's evolution as a media company means a number of media/telecom firms are in play for all or part of the business.
- A sale of the core business might not happen -- it's not the main purpose of Yahoo's meeting -- but on the other hand, a transaction would certainly value it at more than where it is locked up in Yahoo, which may be less than zero because of the investments in Alibaba and Yahoo Japan.
- Estimates vary widely on the Internet business' value, from just under $2B to as much as near $4B. Comcast (NASDAQ:CMCSA) could have room for that after it failed to acquire Time Warner Cable; it's been spreading out investments in a number of media and Internet companies this year, and it could lump in Yahoo's properties with its own Xfinity online video.
- Like Verizon (NYSE:VZ), another potential Yahoo Internet suitor, Comcast has also been shoring up its ad-tech bona fides with some 2015 acquisitions. Verizon could use Yahoo's data to present a better competitive face to Google and Facebook, though it would have redundancies to deal with.
- Other companies like News Corp. (NWS, NWSA) or Time Inc. (NYSE:TIME) may be more interested in some pieces of Yahoo's business rather than the whole. SunTrust analyst Robert Peck even considers AT&T (NYSE:T) and Walt Disney (NYSE:DIS) prospective buyers; Disney for tapping the data to market theme parts and movies, and AT&T trying to match up better against the Verizon/AOL combo.
- Previously: FT: P-E firms show interest in Yahoo's core business (updated) (Dec. 02 2015)
Dec. 2, 2015, 1:44 PM
- At least three unnamed P-E firms have explored buying Yahoo's (YHOO +6.5%) core Internet business in recent months, the FT reports. No formal talks have been held.
- The paper joins the WSJ in reporting Yahoo's board is exploring the sale of the core business this week amid tax concerns regarding the planned Alibaba stake spinoff. The business, pressured by display ad share loss and tough search competition from Google/Bing, had 2014 revenue (ex-TAC) $4.4B and op. income of $755M. Thanks in part to the restructuring of the Microsoft search deal, Q3 revenue fell 8% Y/Y to $1B.
- Re/code, for its part, downplays the WSJ's report. Though it says Yahoo's board will mull the status of the Alibaba spinoff following pressure from Starboard Value to sell the core business instead, it adds the spinoff remains set for early January for the time being, and that a CEO has been selected.
- The site also states Yahoo, which was recently reported to have hired McKinsey to help decide which businesses to keep/shutter, plans to "unload a number of units and cut resources to others also remaining in place."
- Yahoo remains sharply higher in response to the WSJ's report. Shares are still down 29% YTD.
- Update: Sources tell the WSJ Verizon (NYSE:VZ) and InterActiveCorp (NASDAQ:IACI) are among the companies that would "likely explore a purchase" of core Yahoo. P-E firm TPG Capital has reportedly "looked at buying media properties within Yahoo."
Nov. 23, 2015, 8:34 PM
- Data center operators probably aren't in a buying mood for facilities that might be for sale -- particularly CenturyLink's, Macquarie suggests in a new report -- but private-equity firms could come in with bids.
- CenturyLink (NYSE:CTL), the nation's third-largest local phone company, plans to sell 59 centers worldwide, and while Macquarie had thought Digital Realty Trust (NYSE:DLR) would get involved, analyst Kevin Smithen has changed his view after attending an industry trade show.
- He now doubts that a buyer will come from among Digital Realty, DuPont Fabros (NYSE:DFT), Equinix (NASDAQ:EQIX), CyrusOne (NASDAQ:CONE), CoreSite or QTS Realty, with a limited "pool of logical and capable buyers" for assets from CenturyLink, or from Verizon (NYSE:VZ) or AT&T (NYSE:T). But near term, "private equity seems like the most likely acquirer of assets this size."
- While CenturyLink assets are for sale, Verizon CFO Fran Shammo tried to shut down "speculative" reports that the company would pursue $10B in asset sales.
Oct. 23, 2015, 10:42 AM
- AOL (VZ +0.7%) has closed its $248M deal for Millennial Media (NYSE:MM) after 80% of shareholders tendered shares by the midnight deadline.
- Millennial's now a wholly owned subsidiary and has stopped trading on the NYSE. Adding the company gives a boost to AOL's ONE ad network and, AOL says, "adds an incredibly talented team of mobile-first experts, many of whom will take on leadership and integral roles at AOL Platforms."
- Nine Millennial Media execs are taking roles at AOL, though CEO Michael Barrett departed the company.
- Previously: AOL/Verizon buying Millennial Media for $248M (Sep. 03 2015)
Oct. 21, 2015, 4:18 PM
- Comcast (CMCSA -0.7%) is inching toward introducing its own wireless service, triggering part of a 2012 airwaves deal that lets it resell Verizon's (NYSE:VZ) service, Bloomberg reports.
- Verizon CFO Fran Shammo said during the company's earnings call yesterday that unnamed cable companies had said they'd execute their right to resell Verizon airwaves as part of the deal where Verizon bought spectrum from a cable consortium.
- Bloomberg says that Comcast plans a hybrid cellular/Wi-Fi service, not unlike Google's Project Fi and which would draw on Comcast's network of Wi-Fi hotspots that may be 10M strong.
- With notification of Verizon, Comcast could start a market trial within six months and offer it commercially by this time next year.
- Good for T-Mobile (TMUS -1.2%) either way? The carrier comes up in rumors about a Comcast merger -- though Comcast denied them earlier this year -- but in any cast, a Comcast entry would press the big two of AT&T (NYSE:T) and Verizon more. “This will be bad for the carriers, with the possible exception of T-Mobile, and good for cable,” says New Street Research's Jonathan Chaplin.
- And T-Mobile chief John Legere has been not-too-subtly dropping lines about a merger with his company: "You really believe that the Comcast future in wireless is to be an MVNO with Verizon? I mean, give me a break."
- Previously: Legere: T-Mobile will bid in auction; Verizon video a 'debacle' (Sep. 18 2015)
- Previously: Comcast source denies interest in T-Mobile purchase (Jun. 17 2015)
Sep. 22, 2015, 7:24 PM
- With most observers thinking any theoretical merger between T-Mobile (TMUS -1.1%) and Sprint (S +0.3%) would have to wait until a new U.S. administration (and John Legere saying "Oh yeah ... the only possible coming together of Sprint and T-Mobile is if we pick them up off the sidewalk"), analysts at Evercore say the two could combine network assets.
- It would be a sort of a merger, into a new company (a REIT in particular) that would hold their network resources. Bigger investments at lower cost would come, along with a speedier network once spectrum assets were blended.
- Given up, of course, would be the chance to differentiate, and snipe the rival over network power.
- Combined, the two control 255 MHz of spectrum, more than the 147 MHz at AT&T (T -0.9%) or the 116 MHz of Verizon (VZ -0.9%). A new "NetCo" would rent the network back to the two, as well as possibly others, and support MVNO customers.
- As a final entry in the "pro" column, the analysts note a combined network would make any future merger more headache-free.
Sep. 10, 2015, 4:43 PM
- Cablevision Systems (CVC -2.7%) is up more than 32% YTD, but Citigroup's sticking to its "contrarian" view that its movement of late is based on unlikely acquisition hopes.
- The firm's Jason Bazinet has a $21 price target on the shares along with a Sell rating. Shares closed today at $27.29 -- an implied downside of 23%.
- The stock's performance, he says, may be due to investor hopes that Altice (OTCPK:ATCEY) -- the french telecom that acquired Suddenlink -- could snap up Cablevision. But Citigroup thinks a target of the FiOS/wireline business of Cablevision competitor Verizon (NYSE:VZ) is far more likely.
- Without a sale, though, he figures fair value at $18/share for Cablevision, vs. $34/share with a sale.
- That's due to the firm's 25% probability of an Altice acquisition: "In effect, if Altice acquires Cablevision, we see $6 upside to the stock. But, if Altice acquires Verizon [wirelines], we see $10 downside in Cablevision's shares. That's a risk-reward we don't find attractive." In any case, CVC won't trade sideways, he says, with some kind of sale likely eventually.
- Previously: Cablevision up 7.2% as buy-minded Drahi drops name (Jul. 10 2015)
- Previously: Cablevision up 11% following Altice/Suddenlink tie-up (May. 20 2015)
Sep. 3, 2015, 9:15 AM
- Less than two months after TechCrunch reported a deal could happen, Verizon-owned (NYSE:VZ) AOL has announced it's acquiring mobile ad network owner Millennial Media (NYSE:MM) for $1.75/share, or $248M. The price represents a 30.6% premium to Millennial's Wednesday close, but is still well below a 52-week high of $2.40, and over 90% below Millennial's 2012 highs.
- The deal expands AOL's supply-side (publisher-facing) mobile ad footprint, including within international markets. Millennial claims over 65K apps are on its platform, and that it has over 800M "proprietary, anonymous user profiles" for ad targeting. It follows AOL's display ad deal with Microsoft, and comes ahead of the launch of Verizon's Go90 mobile video service.
- For Millennial, the deal provides an exit for a company that has been losing mobile ad share to the likes of Google, Facebook, Apple, and Twitter. It's expected to close this fall.
- MM +30% to $1.74.
Sep. 2, 2015, 6:05 PM
- The FCC has approved Frontier Communications' (FTR +3%) $10.54B purchase of wireline operations in California, Florida and Texas from Verizon (VZ +1.1%).
- The deal, which Verizon undertook in the wake of its $10.4B in bids in the AWS-3 wireless spectrum auction, had previously received approval from the Dept. of Justice.
- It still needs approval from public utilities commissions in California and Texas, though the key hurdles are behind it. The companies expect to close the transaction at the end of Q1 2016.
- Frontier focused on the broadband offerings it could bring: "By doubling our size, we will add scale and scope to our operations, strengthen our product and service offerings, and improve the customer experience," said Frontier CEO Daniel McCarthy. "Our goal is to deliver the life-changing benefits of broadband to an additional 750,000 households at speeds of 25Mbps/2-3Mbps across the entire Frontier multi-state footprint, including California, Florida and Texas, by the end of 2020."
Aug. 5, 2015, 10:01 PM
- AOL (NYSE:VZ) has shuffled its leadership, promoting Huffington Post CEO Jimmy Maymann into a spot with oversight of its consumer brands as well as Verizon's upcoming Go90 streaming video service.
- AOL chief Tim Armstrong says Arianna Huffington is leading the search for a new HuffPo CEO.
- The shuffle will mean AOL is reorganized into three businesses: consumer brands (Maymann's area), business-to-business platforms (ad tech), led by AOL President Bob Lord, and the new "Area 51" unit focused on strategic investment, led by CTO Bill Pence.
- Armstrong had no comment about a possible $300M deal for Millennial Media (NYSE:MM), but said: “We have a goal of becoming the largest mobile media platform whether that’s through investments or M&A. If you look at how aggressive we’ve been in the last 12 months ... you should assume we are serious. We are a company on the move right now.”
Jul. 8, 2015, 11:59 PM
- TechCrunch reports AOL, fresh off being acquired by Verizon (NYSE:VZ) for $4.4B, is interested in acquiring mobile ad network owner Millennial Media (NYSE:MM).
- The site, which is owned by AOL, reports hearing of a $300M-$350M price range, while cautioning "it will still be some weeks" before a deal is announced, should one happen. AOL is said to have begun "kicking the tires" on a Millennial deal weeks ago, before getting slowed down by the Verizon deal.
- Millennial closed on Wednesday with a $217M market cap. With the company forecasting 2015 revenue of $311M-$342M, the reported price range is equal to a modest ~1x forward sales.
- Millennial would significantly increase AOL and Verizon's mobile display ad footprint. Though Millennial has been struggling to deal with competition from Google (AdMob), Facebook, Apple (iAd), and Twitter (MoPub), the company still claimed to support 65K apps and reach 670M+ monthly unique users (175M in the U.S.) as of March 31. It has 750M+ anonymous user profiles for delivering targeted ads.
- It was only last week that AOL announced a deal to "assume management and sales responsibility" for Microsoft's display, mobile, and video ad inventory in the U.S. and 8 other markets.
- Two months ago: Millennial rises in wake of AOL/Verizon deal
Jun. 26, 2015, 11:59 PM
- Despite some friendly talk around consolidation, Cablevision (NYSE:CVC) is an "un-acquirable asset," says a key telecom industry analyst.
- Craig Moffett of MoffettNathanson thinks shares are overvalued and artificially high since a wave of roiling M&A action following the breakup of Comcast's takeover bid for Time Warner Cable.
- The company has too much competitive overlap with Verizon (NYSE:VZ) FiOS, he says.
- "After factoring in its already below-market trailing growth rates, and its FiOS-affected forward growth prospects, Cablevision's shares appeared markedly overvalued even before the latest round of speculation," Moffett writes.
- Today: CVC +4%.
Verizon Communications Inc is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its two segments are Wireless and Wireline.
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