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Can You Make Money on the AT&T Time Warner Deal?
In one of the biggest media company mergers ever AT&T has made a deal to take over Time Warner. CNN reported the media mega deal.
AT&T and Time Warner have agreed to an $85 billion deal – one of the biggest media tie-ups ever.
The deal will be subject to a review by government regulators that could take more than a year to complete.
AT&T will pay $107.50 a share – a big premium over where Time Warner stock was trading last week. Including Time Warner’s debt, the deal’s value is $109 billion.
AT&T is doing this to move beyond its core wireless and internet service into programming. The Time Warner package will include CNN, TNT, HBO, the Warner Bros. studio, as well as other websites and channels. The question for investors is can you make money on the AT&T Time Warner deal or should you avoid it all costs?
Southwestern Bell Corporation
Southwestern Bell Corporation, SBC Communications, was one of the regional “baby bell” spinoffs of the breakup of AT&T. It subsequently purchased other baby bells, Pacific Telesis and Southern New England Telecommunications as well as Ameritech before acquiring its previous parent company, AT&T, in 2005 and changing its name to that of the parent.
Time Warner Corporation
Time Warner is a media conglomerate ranking only behind Comcast and Disney in revenue and only behind in Disney in entertainment brands. The company’s roots are in Time Inc., AOL, HBO, Turner Broadcasting and Warner Brothers. The move by AT&T to acquire this conglomerate is an attempt at complete vertical integration of content and delivery systems. It may make sense for AT&T to do this but can you make money on the AT&T Time Warner deal?