James Altucher
Icahn, Time Warner: Not Just Fishing Expedition
Meanwhile, if AOL can demonstrate continued bottom line improvements (it was the fastest-growing division on the bottom line last quarter) then Time Warner might see more of a 12 to 15 times multiple on EBITDA than the nine times it currently sports.
Additionally, Icahn will press for, and win, an announcement of an increased buyback. Time Warner has announced it will be buying back up to $5 billion of its shares. The company will increase that at some point to $10 billion or more. The cash flow supports it, if it's done over a several-year time period, and it will demonstrate the company is refocusing on shareholders instead of just debtholders. In any of these scenarios, Icahn wins, and he's already done quite well from his initial purchase, and Time Warner shareholders win. So life is good.TheStreet Premium Services
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