Mixed reaction to the Fed’s decision to keep rates unchanged
The SPDR S&P 500 ETF (SPY) stumbled by 0.22% on Thursday, September 17, 2015, after the Federal Reserve decided to keep the interest rates unchanged. It was a close call for the Federal Reserve to decide on the right course of action.
The decision to maintain the status quo was based on the present scenario of increased global market fears and inflation expectations remaining stubbornly low. Below are the performances of the stocks through the day.
Cablevision System Corporations advanced by 13.91%
On September 17, Cablevision System Corporations (CVC) returned 13.91%, making it SPY’s top gainer on the day. The graph below shows the price movement of CVC during September.
From the graph, we can see that the stock was on a steady rise over the past week, however, CVC jumped as high as 15% by noon on Thursday when the company announced its willingness to be acquired by the European company Altice. Altice is a telecom giant in Europe and with ambitious plans to enter the US market. This acquisition would make Altice the fourth-largest cable operator in the US market.
The deal is estimated to put CVC’s enterprise value at $17.7 billion, accounting for ~$34.90 per share of CVC in cash. The company’s shareholders have already approved the acquisition through written consent. The cash value of $34.90 per share consists of a premium of 22% over the closing price of CVC on Wednesday, September 16.
The other peer companies to CVC in the cable services industry are Discovery Communications (DISCA), Discovery Communications (DISCK), Netflix (NFLX), and Time Warner Cable (TWC). The stocks of these companies returned 1.43%, 1.27%, 0.12%, and 0.86%, respectively, on September 17, 2015.
Next, let’s look at the leaders and laggards of other sectors on the day.