The Death of Cable (CMCSA, TWC, CHTR)

Analyst Douglas McIntyre at 24/7 Wall St argues that cable stocks have seen their all-time highs and some are headed to zero:

The largest cable company in the US, Comcast (CMCSA), hit $30.18 last January. The shares may well never get that high again. Time Warner Cable (TWC) hit $44 in January. It is the last times it will see that price. Charter (CHTR) hit $4.93 in July. The company could be bankrupt next year…

In addition to cable’s myriad other problems, According to The New York Times “the FCC is preparing to impose significant new regulations to open the cable television market to independent programmers and rival video services after determining that cable companies have become too dominant in the industry, senior commission officials said.” Part of the new rules that the commission may force on the cable companies would make them offer small content channels more access to channels that reach tens of millions of homes…

All of this adds up to one ugly sum. Cable now has competition from a a very well-funded source in the telecom operators. And, the FCC is opening up what was once a closed system which kept cable with high cash flow and little competition.  The multi-year-high stock prices that cable companies hit earlier this year were a peak.

Full post at 24/7 Wall St

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