Non-Pay TV Households: How Is AT&T Targeting Them?
Beginning in 4Q16, AT&T plans to initiate the three services—DIRECTV Now, DIRECTV Mobile, and DIRECTV Preview.
Why AT&T Might Sell Latin American Pay-TV Assets to Telefonica
Brazil was the largest contributor to AT&T’s revenue from Latin American operations during 3Q15.
What Does AT&T Expect for Video Customer Growth in 2016?
During the Deutsche Bank Media, Internet, & Telecom Conference, John J. Stephens talked about AT&T’s domestic video component after the DIRECTV merger.
Why AQR Capital exits its position in Geo Group Inc.
AQR Capital sold a position in GEO Group Inc. in 2Q14. The company accounted for a 0.0206% position in the fund’s first quarter U.S. long portfolio.
AT&T GigaPower to Reach over 14 Million Customers
AT&T GigaPower is a fiber-based, high-speed Internet service for consumers and businesses. With the DIRECTV transaction, the service will be expanded to reach 2 million additional customers.
Leveraging the Mobile Video Opportunity: Verizon and AT&T
The cross-sell potential for wireless services to DirecTV households was ~15 million. The opportunity for mobile video services was ~21 million households.
Merger must-knows: The shareholder vote and 90% tender condition
Once the SEC approves the proxy, a vote is scheduled. Usually, the last condition for a deal is the vote of the target shareholders.
What was the key growth driver for AT&T’s wireline segment?
Adjusted revenue from IP-based strategic services grew by 14.3% YoY in 4Q14. Adjusted consumer wireline revenue increased by 2.4% during the quarter.
Why bundled offers are helping AT&T gain U-Verse TV subscribers
AT&T has also been able to grow its U-Verse TV subscriber base. AT&T’s subscriber base has increased from 5.0 million in 2Q13 to 5.9 million in 2Q14.
Verizon optimistic about a credit rating upgrade
During the company’s 3Q14 earnings call, management said it wanted to get back to an A- credit rating within four or five years. But that won’t be easy.
Why AQR Capital increased its position in Apple in 2Q14
AQR Capital increased its position in Apple from 0.86% in the previous quarter to 1.24% in the fund’s second quarter U.S. long portfolio.
Must-know: Is the Time Warner Cable–Comcast deal a “do?”
Arbs generally avoid utility deals—and for good reason. Typically, the companies have an aggressive expected timeline and these deals don’t close on time.
Why the government could torpedo the Covidien-Medtronic deal
Frustrated by his inability to get anything done legislatively through Congress, the President has said he will go at it alone and get done what he can through the powers of his office.
Renaissance Technologies increases position in DIRECTV
DIRECTV is a provider of digital television entertainment in the United States and Latin America.
AT&T Toe to Toe with Comcast, Verizon, and Netflix
In broadband, AT&T’s and Comcast’s coverages are comparable, but Verizon’s operations are smaller. In scale in content, AT&T and Comcast outweigh Netflix.
An overview of Berkshire Hathaway’s 3Q positions
The size of Berkshire Hathaway’s US long portfolio increased slightly from $107.5 billion in 2Q14 to $107.7 billion in 3Q14.
How Do Media Networks Make Money?
Media networks face stiff competition for acquisition and distribution of content. Quality and exclusivity add to competition across the media value chain.
Farallon Capital initiates position in Tim Hortons
Farallon Capital Management started a new position in Tim Hortons Inc. (THI) during the third quarter of 2014. The position accounted for 2.62% of the fund’s 3Q14 portfolio.
Getting the Hospira–Pfizer merger deal done
Prior to shareholder approval of the transaction, if Hospira is approached by another suitor, it could discuss a merger with them.
Why AT&T’s DirecTV acquisition could be a serious mistake
AT&T will be paying DirecTV $67 billion, which becomes an expensive acquisition when we consider that DirecTV lacks any wireless spectrum.
Can AT&T’s Wireless Network Capacity Meet New Demands?
Beginning in 4Q16, AT&T (T) plans to start its new OTT (over-the-top) services: DIRECTV (DTV) NOW, DIRECTV Preview, and DIRECTV Mobile.
What Kind of Reach Will AT&T’s Gigabit Services Have?
AT&T has been boosting its broadband proposition with AT&T GigaPower, a fiber-to-the-premises (or FTTP) service.
Is AT&T’s Network Equipped to Handle the New DIRECTV OTT Opportunity?
In 4Q16, AT&T (T) plans to initiate the three OTT or over-the-top services: DIRECTV (DTV) NOW, DIRECTV Preview, and DIRECTV Mobile.
Inside AT&T’s Latest Expansion of GigaPower
AT&T acquired DirecTV, the satellite TV provider, in July 2015. The telecom company’s targeted expansion of GigaPower is going as planned.
What’s Charter’s Post-Merger Position in the US Pay-TV Market?
With the completion of the merger, Charter Communications has the third largest pay-TV base in the United States after AT&T (T) and Comcast (CMCSA).
AT&T’s Focus on DIRECTV Customer Acquisitions
In this series, we’ll look at the highlights discussed by AT&T (T) at the recent Jefferies Technology, Media, and Telecom Conference. Beginning in 4Q16, AT&T plans to initiate three services: DIRECTV Now, DIRECTV Mobile, and DIRECTV Preview.
AT&T’s Segments: What Drove Revenue Growth in 1Q16?
At ~$40.5 billion, AT&T’s revenue was in line with the consensus expectations of Wall Street analysts during the quarter.
The Question of AT&T’s Revenue: Can Growth Remain Robust in 1Q16?
According to the consensus of Wall Street analysts, the growth momentum in AT&T’s (T) revenue is expected to have continued in 1Q16.
A Look at AT&T’s Plans for DIRECTV’s Latin American Operations
During the Deutsche Bank Media, Internet, & Telecom Conference held on March 9, 2016, John J. Stephens talked about DIRECTV’s Latin American operations.
How Is AT&T’s Unlimited Wireless Plan Doing?
AT&T initiated an unlimited wireless combo for DIRECTV and U-verse customers on January 12, 2016.
What Are AT&T’s Views on DIRECTV in 2016?
AT&T acquired DIRECTV on July 24, 2015.
Cost and Revenue Synergies for AT&T from the DIRECTV Transaction
According to AT&T, the DIRECTV merger is expected to help in bringing down costs associated with operations and general administration, supply chain, and content acquisition.
AT&T Completed the DIRECTV Acquisition in 2015
AT&T and DIRECTV merged on July 24, 2015. At the completion of this transaction, the equity value of DIRECTV was ~$47.1 billion and its net debt was ~$15.9 billion.
What Kind of Value Does Verizon See in Quad-Play Services?
Verizon’s (VZ) Marni Walden talked about how the company currently views quad-play offerings.
Update on AT&T’s Cost Synergies after Its DIRECTV Acquisition
During the UBS Global Media and Communications Conference, AT&T’s chief executive officer talked about the cost synergies from the DIRECTV acquisition.
Amazon’s Prime Now Will Hustle Anything—Even Booze—to Your Home
On December 9, Amazon announced that it has started a service for Prime members that includes ordering beer, wine, and spirits for delivery in Manhattan.
How AT&T’s DIRECTV Transaction Will Benefit U-verse
The DIRECTV (DTV) transaction brought content cost benefits for AT&T (T). This was due in large part to the size of the pay-TV subscriber base that AT&T now has after the acquisition.
Why AT&T’s Wireless Revenue Was Mostly Flat in 3Q15
In this series, we’ll look at the performance of AT&T’s (T) overall domestic wireless component in 3Q15. Note that AT&T has divided its operations into four new divisions.
How Atlice’s Acquisition of Cablevision Affects US Cable Industry
The acquisition of Cablevision (CVC) by Altice will create the fourth-largest cable operator in the United States. The US cable industry is already feeling increasing competitive pressure from over-the-top players such as Netflix (NFLX).
Verizon’s View on Quadruple Play
Wireline services of voice and Internet, as well as the pay-TV offering together with wireless services, is a typical quadruple play bundle.
AT&T’s Strategic Services: A Revenue Driver for Business Solutions
The adjusted revenue of AT&T’s Strategic Services has grown year-over-year in the range of ~14%–15% since 2Q14.
AT&T and DIRECTV Aim for New Cross-Selling Opportunities
The transaction between AT&T and DIRECTV brings solid cross-selling opportunities due to the non-overlapping services offered by each.
AT&T’s DIRECTV Merger and New Cost Synergies
By 2018, AT&T expects multiple cost synergies from the DIRECTV merger in its supply chain, operations and general administration, and content acquisition.
Average Revenue per User Rises for Dish Network in 2Q15
In 2Q15, Dish Network (DISH) ended with 13.93 million pay-TV subscribers—compared to 14.05 million subscribers at the end of 2Q14.
Pay-TV Net Additions Fall for Dish Network
In 2Q15, Dish activated around 638,000 gross new pay-TV subscribers—a 2.70% fall compared to 656,000 gross new pay-TV subscribers in 2Q14.
DIRECTV–AT&T’s Mexican Acquisitions Change AT&T’s Revenue Mix
AT&T’s 2015 Mexican acquisitions include Nextel and Iusacell. In 2Q15, AT&T’s international segment generated $491 million in revenue, including results from both these entities.
The AT&T–DIRECTV Merger Makes for Solid Bundling Opportunities
The combined retail presence of AT&T–DIRECTV should have a positive impact on the growth of bundled services in both wireline and wireless segments.
AT&T Gets NFL Sunday Ticket from DIRECTV Deal
The DIRECTV (DTV) merger adds some rich sports content to AT&T’s (T) offerings, including NFL Sunday Ticket and several regional sports networks.
AT&T Seizes Opportunity in the Over-the-Top Market
The US over-the-top market includes key players such as Netflix (NFLX), Amazon (AMZN) Instant Prime, and Hulu Plus. The majority of American have used one of these services.
Cost Synergies from AT&T–DIRECTV Merger Are Adding Up
The AT&T–DIRECTV merger agreement was signed in May 2014. At the time, the companies believed the transaction could produce ~$1.6 billion in annual cost synergies.
DIRECTV Deal: Will AT&T Have Stronger Network Bargaining Power?
With the resulting larger subscriber base, the DIRECTV deal gives AT&T stronger bargaining power to negotiate content costs with media networks.
AT&T Dominates the US Pay-TV Market with DIRECTV Transaction
Cable companies dominate the US pay-TV market. With the DIRECTV transaction, AT&T is now the biggest US pay-TV provider.
The ~$67 Billion AT&T–DIRECTV Merger Is Done
The AT&T–DIRECTV merger agreement was originally signed in May 2014. AT&T (T) has finally acquired DIRECTV (DTV) for ~$67.1 billion, including net debt.
Update: AT&T–DIRECTV Merger
A merger between AT&T and DIRECTV would also allow AT&T to bundle broadband Internet access and voice services with DIRECTV’s video services.
New Charter: Different from the Comcast and Time Warner Cable Deal
Comcast and Time Warner Cable are the two largest cable providers in the US. Comcast is also the largest pay-TV and Internet provider in the US.
Comcast’s Evolving Mix of Video and Internet Subscribers
Comcast has consistently added—net—Internet subscribers. At the same time, since 1Q14, it has either lost video subscribers or only marginally added—net—video customers.
Comcast Business Services: A Consistent Driver of Growth
Cable Communications revenue increased by ~6.3% year-over-year to ~$11.4 billion in 1Q15. Revenue from the Business Services subsegment increased by ~21.4% year-over-year to ~$1.1 billion.
An investor’s guide to risk arbitrage as a strategy
Risk arbitrage as a strategy is basically the act of picking up nickels in front of a steamroller. When a deal successfully closes, you get a nickel. When a deal breaks, you lose a buck.
Merger must-knows: The typical timeline for a friendly deal
Typically, approaches end up with a deal. Why? The target board of directors has a fiduciary duty to shareholders to get the best price for the company.
Identifying and analyzing a typical cash merger arbitrage spread
What are the components of a risk arbitrage spread? There are a number of factors that figure into a trade. Let’s look at a typical cash deal first.
Merger arbitrage must-knows: A typical stock merger spread
Not all deals are cash deals, however. Often companies will issue stock in lieu of giving cash for a deal. This adds a layer of complication to the process and also some risk factors we need to consider.
DIRECTV Transaction: AT&T Now Expects Higher Synergies
The merger is expected to bring typical synergies to the combined entity. But AT&T now expects more benefits from the DIRECTV transaction than it anticipated.
DIRECTV is New Holding in OZ Management’s Portfolio
OZ Management initiated a new stake in DIRECTV (DTV) by purchasing 3,823,963 shares of the company, representing 0.89% of the fund’s 4Q14 portfolio.
OZ Management Initiates Stake in Comcast
OZ Management initiated a new position in Comcast (CMCSA) in 4Q14 by purchasing 8,063,097 Comcast shares, representing 1.26% of the fund’s 4Q14 portfolio.
OZ Management’s New Positions in 4Q14
In 4Q14, OZ Management initiated new positions in Comcast (CMCSA), Yahoo! (YHOO), Endo International plc (ENDP), DIRECTV (DTV), and CDK Global Inc. (CDK).
Must-Know Overview of Rovi Corporation
Rovi Corporation (ROVI) provides content discovery and personalized, interactive experiences to the entertainment media market.
Cisco’s Set-Top Box Business Continues to Decline
A set-top box is a device that converts signals transmitted by IP, cable, satellite, and digital terrestrial (DTT) to the output content that we see on TV.
Some FCC regulations for DirecTV and Time Warner Cable
FCC regulations include the FCC’s oversight of must-carry rules. The FCC also regulates basic service pricing in areas where competition is insufficient.
Telecoms and DBS take pay TV market shares from cable
Telecom companies have significantly upgraded their broadband networks to provide high-quality IPTV services and gain more pay TV market shares.
Why AT&T’s ratings were downgraded by S&P and Moody’s
After AT&T won its bid for the AWS-3 spectrum auction, S&P and Moody’s downgraded AT&T’s credit ratings.
AT&T will provide video on any device
AT&T expects that synergies from the DIRECTV merger, as well as its OTT (over-the-top) content offering, will help it in providing video on any device.
Merger update: AT&T’s DIRECTV transaction seems on track
DIRECTV is a direct broadcast satellite, or DBS, service. At the end of 3Q14, DIRECTV had a video subscriber base of ~20 million in the US and ~18 million in Latin America.
Hospira: A leader in specialty injectable pharmaceuticals
The Hospira portfolio includes generic acute-care and oncology injectables, biosimilars, and integrated infusion therapy and medication management products.
Hospira–Pfizer merger: Benefits from growing biosimilars market
One of the major drivers for the Hospira–Pfizer transaction is the expected growth of the sterile injectables and biosimilar markets.
Is Verizon’s FiOS TV service more cost-effective than cable?
In the third quarter, Verizon added 114,000 net FiOS TV subscribers. The service is credited with being more cost-effective and having enhanced features.
Why AQR Capital exits its position in Tableau Software Inc.
AQR Capital sold a position in Tableau Software Inc. in 2Q14. The company accounted for a 0.0346% position in the fund’s first quarter U.S. long portfolio.
Why AQR Capital opens a new position in Equinix
AQR Capital initiated a new position in Equinix in 2Q14. The company accounts for a 0.221% position in the fund’s second quarter U.S. long portfolio.
Why FiOS Quantum TV could help improve Verizon’s customer service
With this service, Verizon could continue to gain pay-TV subscribers despite the threat from video streaming providers like Netflix (NFLX).
Verizon gains TV subscribers in an otherwise declining industry
Although the pace of growth for Verizon has slowed down a little in the subscription TV market, it still continues to gain subscribers in an otherwise declining pay-TV market.
New York State negotiates the Time Warner Cable–Comcast deal
Time Warner Cable (TWC) and Comcast (CMCSA) must get past the New York State Public Service Commission as well as other state and local authorities.
Strategic rationale for the Time Warner Cable–Comcast deal
On February 12, 2014, Time Warner Cable (TWC) and Comcast (CMCSA) agreed to merge. The two companies provide cable TV and broadband access separate geographic areas.
Must-know: Analyzing the Time Warner Cable–Comcast deal
As an investor, you should always do these calculations based on different timing estimates. Time Warner Cable and Comcast are guiding for an end-of-the-year close.
Why consider possible Integrys–Wisconsin Energy merger scenarios?
In the risk arbitrage world, a 2% spread means a deal without much “hair” on it. The market is assigning a high probability of closing.
Background on Integrys can help you with the Wisconsin Energy deal
Integrys (TEG) is a diversified energy holding company headquartered in Chicago, Illinois. Wisconsin Energy (WEC) is buying Integrys.
Should you get involved in the Integrys–Wisconsin Energy deal?
In merger arbitrage, you’ll generally buy the acquired company’s stock and sell short the acquiring company’s stock. So how will this play out when you look at the Integrys-Wisconsin deal?
Spread analysis: Does the Covidien-Medtronic merger make sense?
To perform merger arbitrage, the investor will generally buy the stock of the company being acquired and sell short the stock of the acquiring company.
Key overview: Merger arbitrage and the Covidien-Medtronic deal
The Covidien-Medtronic deal is a scheme of arrangement, which is an English-style merger where a court has to approve the transaction once the votes are in.
Understanding the rationale for the Covidien-Medtronic transaction
On June 15, 2014, Medtronic (MDT) and Covidien (COV) reached an agreement to merge via a scheme of arrangement. The two companies more or less offer complementary goods.
Merger must-knows: Why the proxy statement is important
If there’s a vote for the deal, the next step will be the release of the preliminary proxy statement. The proxy statement contains all the data in the merger agreement as well as some other important pieces of data.
Merger arbitrage must-knows: A key guide for investors
Merger arbitrage, otherwise known as “risk arbitrage,” is an investment strategy that primarily focuses on mergers and capturing the spreads on announced deals.
Why would AT&T acquire a player in the declining pay-TV space?
We should analyze whether AT&T’s acquisition of DirecTV was a good choice or not—especially when the Pay TV market is undergoing a structural decline.
Merger must-know: Why did AT&T bid to acquire DirecTV?
A few weeks ago, AT&T (T) agreed to buy DirecTV (DTV) for a total valuation of $67 billion. According to the deal, AT&T will pay $95 per share to DirecTV, split between $28.5 in cash and $66.5 in stock.