TWX

Time Warner Inc

TMT, Event Driven/Special Sit


Presented:05/10/2017
Price:$98.74
Cap:$77.94B
Current Price:$98.77
Cap:$77.27B

Presented

Date05/10/2017
Price$98.74
Market Cap$77.94B
Ent Value$98.91B
P/E Ratio18.9x
Book Value$32.81
Div Yield1.63%
Shares O/S789.30M
Ave Daily Vol3,150,932
Short Int1.15%

Current

Price$98.77
Market Cap$77.27B
Time Warner, Inc. is a media and entertainment company, which engages in the provision of cable network, filmed entertainment, and publishing services. It operates through the following segments: Turner, Home Box Office, and Warner Bros. The Turner segment consisting of cable networks and digital media properties. The Home Box Office segment consists of businesses managed by Home Box Office, Inc. The Warner Bros segment produces and distributes television shows, feature films, and videogames. The company was founded on January 10, 1990 and is headquartered in New York, NY.

Publicly traded companies mentioned herein: AT&T Inc (T), Meredith Corporation (MDP), Time Warner Inc (TWX)

Highlights

The presenter likes the Time Warner (TWX)/ AT&T (T) arb spread, and is long shares of TWX with a short position on T as a hedge. With TWX trading at $98 and T at $38.45 he sees the spread at ~$8.00, or 8% gross and ~17% annualized. TWX stock price implies just a 50% chance of the deal closing, which he attributes to antitrust and “Trump-risk”; however, the presenter’s belief is that the probability of the deal closing is 90%+, and he sees AT&T’s Chairman and CEO, Randall Stephenson, making a strong case that they are investing in America, and looking to create jobs (which should resonate with the Administration).

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Idea Discussion

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