Cablevision shares have skyrocketed recently, as the company has made repeated pronouncements about its intention to boost the stock price, somehow, some way. Time to get out now, says Citi, which is cutting the stock from buy to sell:
Cablevision Systems (CVC) was cut to sell from buy at Citigroup, with the broker saying the premium to peers will fade and that the majority of directors are now aligned with Class B shareholders. “Although Cablevision has thus far proved immune to FiOS, we wonder how long this can last. Indeed, investors now have the expectation that Cablevision won’t lose any customers to FiOS. We think that’s probably incorrect,” the broker said.
But what about pressure from Harbinger, the activist hedge fund that’s bought up 8.1% of CVC’s Class A shares? Isn’t that supposed to scare the bejezus out of the Dolan family? It might — if Cablevision didn’t have a dual-class structure that gave the Dolans the ability to run the company as their private fiefdom (that’s the Citi reference to directors being “aligned with Class B sharehodlers”).
Just ask shareholders at the New York Times (NYT), where Harbinger also raised hell recently, and which also has dual-class shares. After the euphoria of a winter rally faded, NYT shares are down 40% in the last year.
See Also: Cablevision To Investors: Here’s A Dividend. Now Shut Up
Cablevision’s Dolans Done Listening, Not Saying Much
New York Times Caves, Allows Two Dissident Board Members
Jim Dolan Buttering Up Cablevision Investors
Will The Court’s Cablevision DVR Decision Give Redlasso A Business Model?
Cablevision: We’re Looking At “Alternatives.” Goldman: Like What?
Business Insider Emails & Alerts
Site highlights each day to your inbox.