Why Time Warner Inc Stock Jumped Today

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Time Warner (NYSE: TWX) shares soared today, gaining as much as 18% after the company received an unsolicited buyout offered worth $80 billion from 21st Century Fox (NASDAQ: FOXA) . Fox shares fell 4% on the news, though the market clearly expects a second offer, given Time Warner's jump. Will a megamerger between the two media giants go through? The slideshow below provides further detail on today's developments, and lets you know what Fox's next move could be.

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  • 1. Why Time Warner Inc Stock Jumped Today Source: Wikipedia
  • 2. What: • Shares of Time Warner Inc were up as much as 18% today after the media giant said it rejected 21st Century Fox’s bid to acquire it for $80 billion. Source: Company logos
  • 3. So what: • 21st Century Fox offered a combination of cash and stock to take over the parent of HBO, Warner Bros., and the Turner cable channels. Source: Company logos
  • 4. So what: • In its statement on the proposal, Time Warner management said it believed it would create “significantly more value” for shareholders as a standalone company, noting the stock’s 150% rise since 2008. Source: YCharts
  • 5. So what: • Time Warner also alluded to regulatory hurdles in its press release as a combination of the two conglomerates would create a $150 billion behemoth in the television, film, and publishing industries. Source: Wikipedia
  • 6. Now what: • Time Warner’s rejection of the proposal opens the door to sweeter offer from 21st Century Fox, which likely explains the stock’s jump today. Source: Wikimedia Commons
  • 7. Now what: • Consolidation has been a theme in the entertainment and media industries this year as AT&T earlier acquired DirecTV, and TimeWarner Cable agreed to merge with Comcast, though both deals must gain government approval. Source: Wikipedia
  • 8. Now what: • Time Warner has been unwilling to hold talks with Fox, indicating that it is not interested in a takeover, no matter the price. Still, Fox could easily make a second offer as CEO Rupert Murdoch is said to be hungry for a deal. Without one, however, expect Time Warner shares to fall. Rupert Murdoch Source: Wikipedia
  • 9. Your cable company is scared, but you can get rich