This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

M&A Update: Why Comcast Buying Time Warner is a Big Deal.

James Dennin, Kapitall: Comcast, the largest cable company by market cap, is buying its largest competitor. 

Comcast (CMCSA) is the largest cable provider in the country. Now it's buying the second largest company by market cap, Time Warner Cable (TWC)

Usually a mega-merger like this is unsettling for consumers. Without options, without competition, what's to prevent the providers of basic (if not essential) services like cable and broadband from jacking up their prices to unreasonable levels? The question is almost certain to be asked by federal regulators, who place limits on mergers and acquisitions for this very reason. 

[Read more from Kapitall: Airline Stocks: Could a Pilot Shortage Squeeze Regional Airlines?]

However, there's a good chance the move may benefit consumers. Right now, the balance of power tilts slightly in the favor of content providers like Disney (DIS), who charge cable companies basically whatever they want for certain channels. The most expensive channel is ESPN, which costs almost $5 per consumer,  even if the consumer doesn't want it. This is the major reason why your cable bill is so high. 

Comcast and Time Warner insist that the merger will give them the leverage they need to negotiate better prices for content, which will help keep prices low. 

But there's a good chance the exact opposite could happen. Politico is reporting that some regulators in Washington are already livid about the deal. They say that to merge the two largest players in an industry where prices have already been going up for years should be " unthinkable." 

Taken together, you have a recipe for what could be one of the most scrutinized acquisitions of all time – as concerns over anti-trust practices, net neutrality, and the re-shaping of content delivery collide. We built a list of some of the major players in the industry to see how stocks might be affected by the merger. As of 1PM EST, Time Warner's share price was almost 7%. 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs