Remember the Comcast & NBC Univision merger? How it was going to benefit the consumer and cut costs? “OMG, it’s gonna be great! Soooo awesome for everyone!!!” Well, that never happened. Now AT&T (T) and Time Warner (TWC) are doing the same thing…and saying the same thing. “OMG! It’s gonna be great! You guys are gonna love it!”Fool me once, s (October 24, 2016)
TWX
I want to talk about Time Warner ( NYSE:TWX ) and AT&T ( NYSE:T ). As you know last week they announced that they are going to be merging; AT&T ( NYSE:T ) is buying Time Warner ( NYSE:TWX ). The bottom line is this, buy AT&T ( NYSE:T ). I saw on CNBC this morning that they were saying, “Oh, I don’t think they did this because of politics. I don’t think they were even thinking about the election.” That is probably one of the dumbest things I have heard said in a while. Because here is the deal: This is all about timing. You get this thing out of the way now while politicians are still looking at other things. It is kind of a big deal for about 15-minutes and then everybody is thinking about the next grope or the next email or whatever the deal is. So they get this thing out of the way and they are kind of slipping it in between administrations. That is really the way I look at it. So in my view, timing is everything.
Whether this is actually going to, as the CEO, I think it was AT&T the stuff that that guy was spewing today about how, “Oh it’s going to increase competition and it is not going to change anything. It just enables us to lower prices for consumers.” Okay, that didn’t happen too much in Comcast and NBC-Univision even though that was the EXACT line that they used, that it actually cuts cost and allows cheaper prices to be passed on to consumers. So we are hearing the same things from these guys. The bottom line is, they should probably just name the conglomerate Orwell or something because this is very 1984. You can see this coming, absolutely see it coming. So with that as an editorial that I really needed to get off my chest, lets look at this thing.
Okay, Time Warner ( NYSE:TWX ), great. They are being bought, well maybe not so much. Ultimately I think this deal is going to go through for reasons that are just quite evident to me. But I am not going to say because somebody will get mad. But lets just say I think this deal will go thorough. But as far as Time Warner ( NYSE:TWX ) goes, I kind of feel like the move has already been made and now, at this point, it is speculation buying Time Warner ( NYSE:TWX ).
Now AT&T ( NYSE:T ) is a different deal because this stock has been drifting down anyway. You look at the dividend, it is over 5 percent, so the stock has taken over a 15 percent haircut already. You can see the kind of selling volume here. They report earnings tomorrow. That is absolutely going to move the stock, but here is the thing: There has already been so much selling in this stock that I really feel like it almost doesn’t matter what the company reports. I think this stock is poised for a rebound. Probably going to see resistance right around here. I would say if the stock jumps, buy it. If the stock falls, buy it. Either way, I think you are going to do just fine making money. The only thing that remains is where to put your stops. And you know what? I will cover that in the next video, promise.
Free Chart