T gets punished for years for not doing anything spectacular to move into hi tech telcom. Finally, Armstrong comes in and makes a very bold move and the stock gets dumped.
IF the TCI deal produces anticipated revenue and profit two to three years forward we'll be looking at a $100 stock. While it's difficult to watch the recent gains erode patience will be rewarded, IMO.
Typical to form all of the hot shot analysts have lowered their recommendations after the stock drops 10% in three days. And, they'll raise again after the stock goes up for a few days so I don't pay much attention to them.
<<A marriage with AT&T would give TCI a measure of confidence in the consumer mind that few other cable companies could match. A less visible, but perhaps more important benefit is the large dowry that AT&T would provide. Cable companies have recently embarked on a program to upgrade their existing coaxial networks and to also lay down fiber optic networks in an effort to keep pace with the incessant demand for bandwidth in all market segments. The financial, technical, and managerial resources that AT&T can bring to bear on these plans would enable the combined companies to make AT&T Consumer Services the most significant force in the US consumer telecommunications services market.
But will the relatives approve?
As with any proposed merger, the consummation will depend on shareholder and regulatory blessings. On the shareholder side, the marriage represents a promising growth opportunity, given the advantages outlined above. Both companies are expected to contribute to the management of the new provider, and the corporate cultures are similar enough to make the merger work. Frost & Sullivan does not anticipate a problem with the owners.
The regulatory blessings, however, are less certain. Certainly the mergers between Bell Atlantic and NYNEX, and SBC and Pacific Telesis were given final approval, but the FCC has demonstrated that it does not rubber stamp all carrier actions. Frost & Sullivan does not suspect any significant objections from the FCC, because a combined AT&T and TCI may be the first real competition to the LECs in the local consumer market. However, it should be noted that Frost & Sullivan feels that the possibility of regulatory approval is less certain than shareholder approval.
A MATCH MADE IN HEAVEN
To put it all into a nutshell, the AT&T TCI marriage has the potential to be a true benefit to the consumers. Certainly the synergies possible to each of the companies are evident, but above all else, the wedding bells are almost sure to sound like competitive choices in the streets of Anytown, USA>>.
SOURCE Frost & Sullivan
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