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Verizon Communications (VZ)

  • Tue, May 26, 5:03 PM
    • With one eye on the Internet of Things, Verizon (NYSE:VZ) is offering a promotion to small-business signups featuring FiOS Internet/voice bundles with 50 Mbps upload/download speeds for the 25/25 Mbps price.
    • That applies to businesses in the FiOS fiber markets. With more devices "talking" to the network, Verizon expects upload activity will double by late 2016.
    • The deal follows a similar previous move upgrading businesses on asymmetrical speed tiers to symmetrical ones via its SpeedMatch program (for example, 50/25 customers were upgraded to symmetrical 50 Mbps).
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  • Tue, May 26, 3:39 PM
    • After Verizon (NYSE:VZ) went to AOL to talk deal last year -- talks that were ultimately successful in a $4.4B merger agreement -- it was approached by three other (unnamed) firms regarding an acquisition, newly filed documents show.
    • Verizon had been thinking about a joint venture in order to get its hand on ad tech for its mobile video plans before going for the whole acquisition, the filings show.
    • Along the way AOL had thought about selling off "brand assets" (Huffington Post, TechCrunch), and the fate of those sites is still an open question.
    • AOL chief Tim Armstrong got a special Founders' Incentive Award of 1.5% of company market value at the time of the deal's completion (at a current $3.9B, a bonus of about $59M) -- though he holds options and shares that would bring him $179M and up.
    • 14D-9 filing
  • Thu, May 21, 9:30 AM
    • Alongside Goldman's list of 50 stocks appearing most as top holdings at hedge funds is its list of the 50 top shorts.
    • New additions this quarter: Baxter Intl (NYSE:BAX), UPS, Marriott (NASDAQ:MAR), NextEra (NYSE:NEE), Ford (NYSE:F), National Oilwell Varco (NYSE:NOV), McDonald's (NYSE:MCD), M&T Bank (NYSE:MTB), CenturyLink (NYSE:CTL), Amgen (NASDAQ:AMGN), Pioneer Natural (NYSE:PXD), Duke Energy (NYSE:DUK), Seagate (NASDAQ:STX), AbbVie (NYSE:ABBV), Cisco (NASDAQ:CSCO).
    • The full list (in order of $ value of short interest): AT&T (NYSE:T), Disney (NYSE:DIS), IBM, Verizon (NYSE:VZ), Intel (NASDAQ:INTC), Kinder Morgan (NYSE:KMI), Exxon (NYSE:XOM), Pfizer (NYSE:PFE), J&J (NYSE:JNJ), Deere (NYSE:DE), Caterpillar (NYSE:CAT), Exelon (NYSE:EXC), GE, Boeing (NYSE:BA), Halliburton (NYSE:HAL), Fox (NASDAQ:FOXA), Comcast (NASDAQ:CMCSA), UTX, Regeneron (NASDAQ:REGN), Merck (NYSE:MRK), (NYSE:CRM), AbbVie (ABBV), Conoco (NYSE:COP), Wal-Mart (NYSE:WMT), Eli Lilly (NYSE:LLY), Celgene (NASDAQ:CELG), Schlumberger (NYSE:SLB), AutoZone (NYSE:AZO), Wells Fargo (NYSE:WFC), Emerson (NYSE:EMR), McDonald's (MCD), Reynolds (NYSE:RAI), Target (NYSE:TGT), Accenture (NYSE:ACN), Coca-Cola (NYSE:KO).
  • Tue, May 19, 9:39 PM
    • Verizon (NYSE:VZ) is seeing about 60% savings as it takes initial steps into converting central offices to fiber from its old copper infrastructure, its senior VP of transformation said at a conference today.
    • The company has only transitioned seven of more than 2,000 COs, but it's seen enough to plan to switch them all over, making it the only carrier to make that attempt so far.
    • The move was spurred after the company had to replace one of its largest New York COs, wrecked by Hurricane Sandy in 2012. Now, Verizon's Sowmyanarayan Sampath says, the company doesn't really need 60-80% of the 50M square feet of CO real estate it holds today.
    • Why now? Copper revenues slides 8-10% each year while remaining a fixed cost. The old network is a $100B annual-revenue industry that costs $63B just to power.
    • Speaking of Verizon and fiber: Cablevision (NYSE:CVC) has stepped up a legal scuffle with Verizon by filing suit, asking a judge to find that a Cablevision commercial claiming that Verizon's FiOS isn't "100% fiber optic" is true. Verizon had previously challenged the ad. Cablevision says that the service uses regular cable in the home.
  • Fri, May 15, 7:07 PM
    • Broadband subscribership grew by nearly 1.2M in Q1, according to a Leichtman Research Group report examining the top 17 ISPs.
    • Cable made up 86% of that growth; Comcast (NASDAQ:CMCSA), the nation's largest MVPD, added 407K users by itself. It's the first quarter since Q1 2008 where cable logged more than 1M net broadband adds, says Bruce Leichtman.
    • Overall, leading ISPs now boast 88.5M subscribers, cable with 53M of those.
    • Not coincidentally, cable's recently had momentum on the network-investment front, with firms like Comcast and CenturyLink (NYSE:CTL) investing in their gigabit broadband installations.
    • Related companies: VZ, T, CMCSA, CHTR, TWC, CVC, CTL, FTR, WIN, FRP, CBB
    • Previously: A hint for Comcast's 2-Gig pricing? (May. 11 2015)
    • Previously: Comcast call: Now more broadband company than cableco (May. 04 2015)
  • Thu, May 14, 7:00 PM
    • Bigger set-asides of spectrum for Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) would risk ruining the upcoming broadcast incentive auction, says Recon Analytics' Roger Entner.
    • Smaller competitors have asked for rules that limit how much spectrum giants AT&T (NYSE:T) and Verizon (NYSE:VZ) could bid in, but that risks ire from television broadcasters who will be on the receiving end of the bids, he says: "The fewer the restrictions, the smaller the set-asides, the more revenue will be generated during the auction."
    • T-Mobile and Sprint have enough spectrum, so he suggests a better idea is a 20 MHz set-aside for small rural operators. The FCC is reserving 30 MHz of an expected 70-80 MHz; opponents want a 40 MHz set-aside.
  • Thu, May 14, 12:33 PM
    • Facing criticism that his $3B wireless spectrum discount took money out of taxpayers' pockets -- and with the discount still unapproved by the FCC -- Dish Network (DISH +1.4%) CEO Charlie Ergen said it actually made taxpayers better off.
    • Dish used designated entities ((DEs)) SNR Wireless and Northstar Wireless to bid for $13.3B in spectrum while paying only $10B due to their small-business discounts. Competitors and critics have cried foul, noting among other things that that was $3B taxpayers wouldn't see.
    • Meanwhile, Ergen argues that the auction structure drove the total bidding to unforeseen levels, figuring that the bidding-up spurred by the DEs raised the value of the overall auction (which came in at $45B) by some $20B-$25B. Even with Dish's $3B discount, Ergen says, the taxpayers came out much further ahead.
    • As for other complaints, "We don't have de facto or de jure control of those DEs, based on the structure that we have," Ergen says, while noting again the FCC was unanimous in setting the auction rules ahead of time.
    • "I think we followed the rules. I think there's some sour grapes ... perhaps a Verizon (NYSE:VZ) now sits back and says 'We don't have the fastest network, T-Mo has the faster network ... We lost customers in the first quarter.' "
    • Previously: WSJ: FCC may reject $3.3B Dish Network spectrum discount (Apr. 27 2015)
    • Previously: Reuters: FCC moving toward reform of wireless spectrum bidding (Mar. 23 2015)
  • Thu, May 14, 2:03 AM
    • AOL (NYSE:AOL) Chief Executive Tim Armstrong stands to net millions from the sale of his company to Verizon (NYSE:VZ), though he won't be eligible for a large portion of that money until a year after the deal closes.
    • Armstrong has spent around $25M of his own cash building up his effective 6.7% stake in AOL. Profit from that sale, plus stock awards and options, would bring his total haul from the transaction to $179M, excluding taxes.
  • Tue, May 12, 3:44 PM
    • After earnings last week, AOL CEO Tim Armstrong pointed out how programmatic ads were key to the company's growth -- and now they're the key to its $4.4B acquisition by a video-focused Verizon (NYSE:VZ).
    • For Verizon, the timing and focus will be on an upcoming video service that is likely to focus on shorter clips rather than long shows (in keeping with their stated target of mobile-viewing millennials) and would combine key assets in the OnCue service it bought from Intel and the ad-insertion tech that AOL provides. The benefit would come in faster, better ad sales. AOL's Platforms unit grew revenues 21% to $279.8M.
    • Wells Fargo's Jennifer Fritzsche points out the difference between Verizon's strategy and that of AT&T: "While T believes there is a greater need to own more physical infrastructure (through DTV), VZ is building up more assets to strengthen its 'mobile first' OTT initiative -– with advertising playing a key role."
    • Verizon's approach to video is cheaper, too, notes Andrew Dowell in comparing a 4.4B AOL deal with a $49B DirecTV deal: "Verizon is going after millennials. AT&T has its eye on their parents."
    • Meanwhile, Macquarie has downgraded Verizon to Underperform, from Neutral, with a new price target of $45. Shares today are trading down 0.4% to $49.61; AOL is up 18.5% to $50.47.
  • Tue, May 12, 3:28 PM
    • Sprint (S -1%) will pay $68M and Verizon (VZ -0.4%) will pay $90M to settle cramming cases, where regulators charged that the carriers billed millions of dollars in unauthorized charges, the Consumer Financial Protection Bureau said.
    • Of the combined $158M, $120M will go in refunds to affected customers and another $38M in federal and state fines.
    • Following on Sprint news earlier today, this means all of the big four carriers have agreed to pay compensation for cramming charges. Carriers generally stopped using the related premium messaging services after 2013.
    • Previously: Sprint to pay $50M to settle cramming lawsuit (May. 12 2015)
  • Tue, May 12, 11:23 AM
    • AOL (AOL +18.7%) has been negotiating with multiple parties to spin off The Huffington Post amid its talks to sell itself to Verizon (VZ -0.6%) for $4.4B, Re/code reports.
    • AOL bought The Huffington Post in February 2011 for $315M, and talks about spinning it off circle around a valuation of $1B, likely structured as a joint venture rather than an outright sale.
    • "We've seen a lot of interest in the content brands we have," AOL CEO Tim Armstrong told Kara Swisher, though AOL's other content properties (including sites like TechCrunch) are reportedly not part of these talks.
    • For Verizon's part, to the extent the deal is also about sourcing video content for its streaming ambitions, HuffPost Live (the all-day video streaming network) has shown significant growth since its 2012 launch, and the company has pressed applications to bring it to conventional TV in Canada.
    • Previously: Verizon scoops up AOL for $4.4B (May. 12 2015)
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  • Tue, May 12, 7:08 AM
    • The $50 per share deal will take the form of a tender offer followed by a merger, with AOL becoming a wholly-owned subsidiary of Verizon (NYSE:VZ). AOL chief Tim Armstrong will continue to lead the company after the deal closes.
    • "Verizon's acquisition further drives its LTE wireless video and OTT (over-the-top video) strategy. The agreement will also support and connect to Verizon's IoT (Internet of Things) platforms, creating a growth platform from wireless to IoT for consumers and businesses," says the company.
    • Closing is expected this summer.
    • Source: Press Release
    • AOL +18% premarket to $50.25, VZ -0.95%
  • Mon, May 11, 8:53 PM
    • AT&T (NYSE:T) has urged the FCC to put a cap on wireless spectrum-auction bidding credits of $10M for designated entities ((DEs)), the companies funded by bigger firms that can bid on their behalf and earn small-business credits.
    • Competitors have been harshly competitive of Dish Network (NASDAQ:DISH), who used two DEs in the AWS-3 auction to apply for $3B in bidding credits, effectively winning $13.3B in spectrum for just $10B in bids. The FCC is scrutinizing those credits, and a $10M cap would have effectively invalidated Dish's strategy.
    • Meanwhile, the FCC is reportedly circulating a draft order for the 2016 broadcast incentive auction that is almost unchanged from the original, despite entreaties from various firms/groups (also including Verizon (NYSE:VZ)) for changes. The draft is scheduled to be released next month.
    • Previously: WSJ: FCC may reject $3.3B Dish Network spectrum discount (Apr. 27 2015)
    • Previously: Big bidders receive spectrum from FCC auction; Dish waiting (Apr. 10 2015)
  • Mon, May 4, 7:51 PM
    • Broadcast revenues for Saturday's Floyd Mayweather-Manny Pacquiao fight might touch $300M, based on estimates of just how big the money-soaked event turned out to be worldwide.
    • Co-promoters HBO (NYSE:TWX) and Showtime (NYSE:CBS) were still counting money today -- many buys come at the last minute -- but early pay-per-view buys indicated the matchup would surpass the previous record of 2.48M buys (2007 Mayweather-De La Hoya fight) as well as the revenue record of $152M (2013 Mayweather-Canelo Alvarez).
    • Purchases came in fast and late enough that the fight itself was delayed Saturday night, to let networks process the transactions.
    • Verizon (NYSE:VZ) said its purchases quintupled on Saturday, leading to its own PPV record of 250K buys.
  • Fri, May 1, 6:07 PM
    • Verizon (NYSE:VZ) and Cogent Communications (NASDAQ:CCOI) averted a possible showdown by striking a multi-year interconnection pact that will govern Internet traffic exchanges between the telecom and the wholesaler.
    • The deal is similar to one that Verizon reached with Level 3 Communications (NYSE:LVLT) previously. Firms like Cogent and Level 3 distribute traffic on behalf of major media firms like Netflix that deliver services via Internet, and they have increasingly fought with carriers over whether they should have to pay to connect to networks.
    • In the meantime, disputes started to slow service for millions by late last year. Cogent founder and CEO Dave Schaeffer says links between the two companies are still "massively oversubscribed."
    • Verizon says the new deal will let networks exchange data more easily, while Cogent points to the fact that it won't have to pay Verizon under the deal.
    • The move makes some peace for the two in an area that is about to get heavy regulatory scrutiny under the FCC's new net neutrality rules. The agency reserved the power for one-on-one rulings in interconnection disputes that might come up if a carrier complains.
  • Tue, Apr. 28, 8:42 PM
    • During T-Mobile's (NYSE:TMUS) Q1 earnings call, colorful CEO John Legere took another opportunity to hint at the tie-up that increasingly seems to be in the company's future: with a cableco that offers broadband.
    • Just days after FCC opposition killed the Comcast-TWC merger, Legere pointed to the need to counterbalance AT&T (NYSE:T) and Verizon (NYSE:VZ), which combine wireless service with broadband offerings and even TV business.
    • Regulators seem to be opposed to cable-cable deals, and wireless-wireless deals like aborted plans for a Sprint (NYSE:S) merger with T-Mobile -- but Legere notes a natural fit may occur across industries: "The tangential players are touching mobile players in a way that makes a go-to-market strategy."
    • Analyst Craig Moffett urges caution, as regulators might already see the two industries as competition. "Wireless broadband is clearly the FCC's best hope for a counter to cable's wired advantage. They might decide that they aren't ready to allow a combination like that."
    • Possible cable suitors: CMCSA, TWC, CHTR, CVC
    • After earnings today, TMUS -0.3%.
    • Related: T-Mobile US (TMUS) Q1 2015 Results - Earnings Call Transcript (Apr. 28 2015)
    • Previously: T-Mobile grows Q1 revenues 13%, adds 1.8M subscribers (Apr. 28 2015)
    • Previously: T-Mobile keeps fanning Dish partnership flames (Mar. 06 2015)
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Company Description
Verizon Communications Incis a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its two segments are Wireless and Wireline.