Several analysts believe that with the highly regarded Rutledge's exit, the company could be a takeover target, as the Dolan family may seek an exit strategy in the coming months. Comcast (CMCSA) and Time Warner Cable (TWC) are two of the most logical buyers, according to Bernstein Research.
In a research note, Bernstein Research's Craig Moffett wrote, "TWC and Comcast could team up and divide the assets, as they did with Adelphia (TWC in that scenario would take New York City, Rockland, Westchester, and Long Island, and Comcast would take Northern New Jersey and Conneticut), but that sure wouldn't generate much of a bidding war." He rates shares of Cablevision at market perform with a $20 price target.Deutsche Bank analyst Douglas Mitchelson noted that Rutledge has helped drive the strongest penetration and ARPUs (average revenue per user) in the industry, which could potentially be attractive to a potential bidder. Rutledge has a one-year no compete clause in his contract, and according to a Reuters article, there is speculation he might join rival Charter Communications (CHTR). Cablevision's video, broadband, and voice penetration are all significantly higher than the sector average. The company is generating $152 per month in revenue from basic video services, 14% higher than the $133 average, according to Mitchelson's note. Mitchelson has a buy rating but lowered his price target to $20 from $26 on the news. Evercore Partners analyst Bryan Kraft, who has an underweight rating on shares, wrote that although a decision to sell the company may not happen immediately, it does leave the door "more open" than it was before the announcement. Cablevision shares were selling off Friday, down 10.5% at $12.46 in midafternoon trading on 10 times the average daily volume. -- Written by Chris Ciaccia in New York >To follow the writer on Twitter, go to http://twitter.com/commodity_bull. >To submit a news tip, send an email to: firstname.lastname@example.org
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV