AT&T, Inc. May Not Buy DIRECTV -- But Someone Should

Since May 1, 2014 rumors have been swirling that satellite television provider DIRECTV (NASDAQ: DTV  ) is in talks to be acquired by telecommunications giant AT&T  (NYSE: T  ) . While this remains just a rumor for the time being, investors should keep in mind that not only is DIRECTV a unique player in the war for your living room, but it is also a fantastic business. With the cable-industry experiencing consolidation thanks to the recently announced acquisition of Time Warner Cable (NYSE: TWC  ) by Comcast (NASDAQ: CMCSA  ) , one thing is clear: AT&T may or may not wind up acquiring DIRECTV, but someone should. The Motley Fool Consumer Goods Analyst Sean O'Reilly explains why.

DIRECTV is just a small part of the $2.2 Trillion war for your living room
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 

 


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 12, 2014, at 1:08 PM, Mega wrote:

    It's not a rumor. DirecTV and AT&T have confirmed they are in negotiations.

  • Report this Comment On May 12, 2014, at 5:29 PM, smalls6262 wrote:

    A DTV deal does not make a logical play for T just on South American markets because the US satellite market is about to come under heavy fiber deployment pressure in 2015 as G.fast is deployed. Bigger market cap does not always mean better and Stephenson may be commiting serious error here if these rumors play out. A 40-50B error that would take several years to play out. If this rumor has legs then it better be more than a South America play.

    Guy on Bloomberg says quad play is reason but it is a fools game with the onset of high speed fiber cannabalizing satellite in U.S. Market. Maybe T will buy it and then merge with VOD this summer so the satellite play can move into emerging markets in Africa/India. South America motive is not reason enough on its own. This will be a blunder to shareholders of a 40-50B dilution.

    PS still nobody confirming talks other than "insider sources".

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