I can't believe it myself, but I agree with
and his negative comments on the
merger made this morning on
. The more I think about this TCOMA-ATT deal, the more I realize how stupid it is. The whole tech world is going away from cable into wireless and phone lines and ATT is spending $50 billion to buy the debt of TCOMA. Jimmy, you are dead right.
It is true that
et. al have hedged bets and have agreed to work with the cable companies in an episodic sort of way. It is also true that
has made some deals, billion-dollar deals, but that's not a lot for Microsoft, to stay in the cable loop.
But cable is not the winner. The
/Intel PC solution for data, voice and ultimately video will be the winner. ATT has neither the infrastructure nor the horsepower to turn that tide.
When I heard that T was thinking about buying
, I thought, hey, that might be a winner. The Internet is a phone line, not a cable line. (Yes, and I was and am long AOL and am not long TCOMA.) ATT has been completely flummoxed by the Net and doesn't have a clue how to get involved. In one fell swoop they would be getting Case and Pittman, who together understand the consumer and are consumer friendly. If you want to harness the Net, you must figure out a way to make the consumer like it. That's what Case and Pittman do for a living. This is a consumer issue, NOT A TECH ISSUE. The techies will solve the problems of delivery, I promise you.
Not Malone. Malone piles on debt. Malone pisses off consumers. Malone stands for anti-consumer, pro-monopoly high-priced anti-technology answers to pro-consumer questions. Malone is an '80s guy, trapped into thinking how many homes he can hoodwink. Innovation? Forget about it. That's why T is going down. Wonder if Robert Allen advised T? And did Milken advise TCOMA?
Why this was not clear to T is that Malone has a mystique that has fooled so many people that he shouldn't be allowed to be in a room with someone with a checkbook. And Armstrong had his checkbook at the ready. Five years from now, when T writes this acquisition down to zero, we will realize that cable was a relic, a vestige wiped out by innovations made by Intel and Cisco et. al to harness the copper lines and forcefeed video through to the only device of prominence in your house, your PC/home entertainment center.
This merger is a sideshow, a bailout for Malone's debtholders and a bonanza for bankers. Period.
Holy cow, Mr. Rogers and I on the same page. Get me wardrobe, on the hop. See if they can rustle up a bow tie.
* * * * *
Stay tuned to the site this weekend for the rest of my three-part
series on trade execution problems and how to deal with them, as well as my regular Saturday rewrite for newbies...
James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com.
At time of publication his fund is long America Online, Cisco, Intel and Microsoft, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to TheStreet.com at