In #8585 I gave my reasons why the FCC can't allow this purchase. If they do, they will be going against law and impugning their consistency in rule making. An objecting entity can sue to contest the purchase on restraint of trade grounds and win. This outcome would be disaster for the FCC since it could be construed that the FCC is in the pocket of corporate interests.
I know I'm going against the opinions of Washington lawyers, the WSJ, analysts, corporate lawyers, independent jurists, and god knows who else, but their arguments are not sound. In fact, they haven't made any material arguments. I have. If my arguments are not valid, then let's see someone refute them. I can't predict what will happen since that requires knowing how stupid people can be. That isn't a bounded quantity.
Since this thread does not have AHhaha as the subject, what do my claims imply for ATHM? If the FCC agrees with me, ATHM is going to have a very rough time of it short term. All the weak points which have been ignored in the rush to play the Wall Street game, will become materially apparent. Like most Internet stocks it is hard to guess what the company is worth.
The good news is that the ATHM content portal would be available on RR whoever owned it and on AOLBB so that if AOL wanted BB, they'd have to offer ATHM too. T and ATHM would have to stop faking it and start creating a helluva service, since they couldn't hide behind a monopoly. Can they make the killer portal towing half the world's BB subscriptions? Do I need to remind anyone of MSFT's bloated product or TCI's wonderful cable tv service?
Thus, long term holders should hold. If I'm right about the FCC, that is in ATHM's greatest long term interest and incidentally in T's best long term interest too. This UMG move is too wild. Armstrong needs to show some patience and remember that he is CEO of a company which is still the venerable ATT whatever else it would like to become. The company has a lot on its plate with the BT merger, the purchase of IBM's data network, foreign deals, copper telephony, deals with TWX, BEL, etc. On top of all that getting bogged down supporting a crush of broadbanders too might force them to suspend the dividend. Wonder what that would do to their stock? |
