D.C. Memo: Cable Stocks Mostly Slumped in 2024
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Wall Street: Cable stocks mostly took a drubbing in 2024. But there was one outlier – TDS Inc., which saw a big run up fueled by three proposed transactions starting in late May. TDS – a mid-cap company which owns TDS Telecom and 83% of UScellular (which has its own stock) – surged in response to the announced sale in May of UScellular's wireless operations and certain spectrum assets to T-Mobile for $4.4 billion, including about $2 billion in debt. The stock got more support after UScelluar said it was selling spectrum to Verizon and AT&T for $1 billion each in October and November, respectively. TDS was also the best cable stock in 2023, up 77.5%. The T-Mobile-UScellular transaction has encountered some resistance. The Communications Workers of America (CWA) asked the FCC to deny the merger as proposed. The Computer & Communications Industry Association (CCIA) said it was concerned the deal would raise prices and reduce competition.
Meanwhile, Comcast saw a 14% stock decline thanks in part to the expected loss of 100,000 broadband subs in Q4, with Comcast Cable President and CEO Dave Watson saying the broadband market “remains competitively intense." Comcast also made news in November by announcing the spinoff of cable channels CNBC, USA Network, MSNBC, Oxygen, E!, SyFy and Golf Channel – a move some saw as Comcast's final capitulation to consumers' migration to streaming. Charter Communications was down nearly 12% on the year. Although the nation's No. 2 ISP expects to lose 100,000 subs in Q4, CEO Christopher Winfrey said he thinks the outlook will improve after factoring in losses associated with two hurricanes and the end of the Affordable Connectivity Program (ACP). Charter in November announced it was buying Liberty Broadband, which owns at least 26% of Charter's stock. Putting money in the S&P 500 in January would have returned investors 23.3% in 2024.