Further, improved Internet distribution of video is going to "force the change."
A "post-bundle TV world" may be a few years out, but this is an issue that is going to be prevalent over the next couple years and certainly within most investors' time horizon. Already, Netflix is beginning to track the Internet speed offered by different providers, something
it calls the "ISP Speed Index"
. And, it is certainly an issue that Malone will face in trying to push Charter up the rankings as he had TCI so many years ago.
Then, there is another issue facing Malone -- scope of offerings. Liberty Media has its hands in a lot of pies. According to
the company's Web site
, its subsidiaries include the Atlanta
National League Baseball Club
; it holds interests in
Sirius XM Radio
Barnes & Noble
and minority stakes in
Time Warner Cable
An impressive portfolio, but the range of interests is vast, and not in the same direction.
Malone is equally as involved in a range of activities. "He currently serves on the board of directors for the Bank of New York, the CATO Institute, Discovery Communications Inc., Discovery Holding Company, Expedia and The Nature Conservancy,"
according to the Wall Street Journal
. "Additionally, Mr. Malone is chairman emeritus of the board for Cable Television Laboratories Inc. and chairman of Liberty Global Inc."
Like Liberty, Malone's interests are broad. Does he have the time left over from his various pursuits to invest in bringing Charter from being eighth in the pay TV market to first, like he did with TCI? I'm not sure.
My recommendation is to short Charter now, while momentum is up, and cash in probably around the end of the week. Charter could be a good buy, but this momentum is based on reports of a deal, so odds are the boost is going to ebb away before too long.
In the meantime, I say keep an eye on Liberty. The negative momentum around the stock right now could make for a good point at which to buy in. Even buying in at $110, if Liberty reaches its target $130, that's a one-year gain of over 18% -- not too shabby.
At the time of publication, the author held no positions in any of the stocks mentioned.
Written by Renee Butler in Seattle.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.