1) Media Disruption, Mergers & Fear of the Future
AT&T, Time Warner and the Entire Media Merger Frenzy Explained
Wall Street Journal (wsj.com) video above published Jun 14, 2018: From AT&T and Time Warner to the hot pursuit of 21st Century Fox and Sky, media mergers are in full swing. Why now? WSJ's Amol Sharma answers all your questions about the forces driving media deals.
Is the Media Sector Evolving or Devolving?" | inflectioncapital.co: "The media sector is at an existential crossroads. Its content is going direct to the consumer and traditional distributors like cable and satellite will be bypassed. Savings from cutting out distributors will be passed on to the consumer and video content choice should rise, allowing consumers to watch more TV shows and films. Consequently, audiences will continue to splinter and it will become more costly to attract an audience; industry revenue growth and margins will both deteriorate. 21st Century Fox and Disney have taken steps to produce more value for shareholders. However, that value will likely accumulate only at a low-double-digit annual rate. For the remainder of media, value is likely to fall as the companies don’t have a strategy to resolve their legacy dependencies. The tech and telecom titans (AT&T, Apple, Amazon, etc.) that already have adjacent media business will likely only accumulate value from their core businesses, not from their media assets. This is because video packaging and distribution is becoming a profitless business—unless one has massive global scale. Additionally, there is little way for the other tech and telecom titans to buy Discovery, Viacom, AMC Networks, etc. and create meaningful shareholder value. All the needle-moving assets are now taken. In contrast, Netflix has reached such a large scale in subscribers and content-acquisition capability that its market value is likely to accumulate at a rate faster than low double digits." (emphasis added) [Editor's note: for more, read the White Paper (pdf).]2) Time Warner - What AT&T Got For $81 Billion (closing price per the 8K filing) - AT&T's acquisition of Time Warner closed on Thursday, June 14, 2018. Since then AT&T (NYSE:T):
The chart below shows the revenue of AT&T and Time Warner in 2017 by business segment
Source: Statista.com
See also:
3) Investing
The Week: NASDAQ Composite -0.7% | S&P 500 Index -0.9% | DJIA -2%.
But on Friday (June 22), both the S&P 500 and the Dow ended trading up--S&P +0.2%, Dow (DJIA) +0.5%.
Investing Notes: Short Tesla $TSLA?
Black Swan author Nassim Taleb defended Tesla after an actress posted a video of a Tesla on fire:
Other notes:
4) ICYMI Tech News:
-- John Poole, Editor, Domain Mondo
feedback & comments via twitter @DomainMondo
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See also:
- AT&T (NYSE:T) Best Dividend Stock Of All Time Now Trades Cheap--SeekingAlpha.com
3) Investing
But on Friday (June 22), both the S&P 500 and the Dow ended trading up--S&P +0.2%, Dow (DJIA) +0.5%.
“Underlying breadth points to an eventual new high in price for the S&P 500,” wrote Bespoke Investment Group, in a report cited by Raymond James. The “long-term uptrend channels are still in place.”--Improving market breadth could indicate stock strength ahead | MarketWatch.com 18 June 2018.
"... the stock market - particularly big-tech ... Every dip is met by a wall of buying, ramping the market ever higher ..."--This Is The Greatest Short-Squeeze In History | ZeroHedge.com 20 June 2018.Wall Street's Charging Bull
Black Swan author Nassim Taleb defended Tesla after an actress posted a video of a Tesla on fire:
On Monday Elon Musk showed off Tesla's newest production line and predicted that those who have shorted $TSLA “have about three weeks before their short position explodes.” But note the report out Friday, June 22, 2018: Exclusive: Tesla to close a dozen solar facilities in nine states--Reuters.com.There are 150K-200K car fires per annum. You take one event & an emotional statement of an actress & turn it into a statement about the safety of @Tesla. And this is 2018.— Nassim Nicholas Taleb (@nntaleb) June 17, 2018
I am blocking any commentator who doesn't get it. In this and other similar situations. Finito.
Other notes:
- The Cass Freight Index: A Measure of North American Freight Activity | cassinfo.com: shipments and expenditures up significantly. "The US is pretty much the only normalised economy on the planet"--Bill Blain. See also The Huge Ships for the Booming LNG Trade | WolfStreet.com.
- Why heads are exploding at the Fed | MarketWatch.com: at 3.8% unemployment, all of the econometric models indicate we should be seeing a lot more wage and price inflation than we are experiencing, but those econometric models are based upon historical statistics which don't factor in the consequences of the technological and institutional changes that are redefining U.S. labor, commodity and product markets, including the disappearance of the Phillips curve—the hypothesized inverse relationship between inflation and unemployment.
- Euro Risk: "The reasons the European economy remains so anemic are more to do with the Euro – the need to restructure economies at a time of enforced austerity to make the common currency work."--Bill Blain. See also Italy never should have joined the euro, and the ECB can’t rescue it from its next crisis: "Italy could plunge the eurozone into an unmanageable crisis"--MarketWatch.com.
- What about China? Read this week's expose at Axios.com, including intellectual property theft, the link between China's anti-monopoly policies and its industrial goals, etc.
- Global Debt: Are debt crises in Argentina and Turkey a global warning sign? | TheGuardian.com by Kenneth Rogoff.
- If it’s already carrying significant debt, it’s “really handcuffed”--The Toys “R” Us Bankruptcy and Private Equity | TheAtlantic.com--“Had these companies remained publicly owned, they would have had a much higher probability of being able to adapt, to invest, and to withstand the ups and downs of the economy."--Thomas Paulson, founder of Inflection Capital Management (inflectioncapital.co).
- Investing Without People (pdf) by Howard Marks, Oaktree Capital (oaktreecapital.com), and Revamping Or Starting A Portfolio Now--SeekingAlpha.com.
4) ICYMI Tech News:
- Internet Tax: US Supreme Court allows states collect sales tax from online retailers--Reuters.com.
- Regulation: FTC plans to reexamine how it polices tech companies | TheHill.com.
- Yahoo Mail aims at emerging markets and casual users, launches versions for mobile web and Android Go--TechCrunch.com.
- 5G: Ericsson needs industries to embrace 5G to underpin its recovery--Reuters.com.
- Data: The consumer data collection industry is about to explode (opinion June 19, 2018)--TheHill.com.
- Google to invest $550 million in JD.com, China's 2nd largest e-commerce site--cnbc.com.
- Google: More transparency and control in your Google Account--blog.google.
- Google rolls out web interface for Android Messages enabling texting from desktop and says GIF search, Smart Reply, and more features coming--blog.google.
- Personal tech--pocket-lint.com re: bbc.co.uk/iplayer--How to watch BBC iPlayer in the US and elsewhere.
- Work: Companies need older workers and here is why--Reuters.com.
- Environment: By 2030, an estimated 111 million metric tons of used plastic will need to be buried or recycled somewhere else—or not manufactured at all according to a new analysis of UN global trade data by University of Georgia researchers--Bloomberg.com.
-- John Poole, Editor, Domain Mondo
feedback & comments via twitter @DomainMondo
Follow @DomainMondo
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