The number of regional cable providers keeps shrinking. Comcast (NASDAQ:CMCSA) is offering to buy smaller rival Time Warner Cable (NYSE: TWC) in a deal valued at $45.2 biillion.
The logic is simple. Cable providers have been hooking up over the years, and this is an industry in which economies of scale exist. The move is seen as a win-win for the two titans of pay TV, and Pacific Crest's analyst even reiterated his bullish rating on Comcast, suggesting that the stock could go as high as $70 based on next year's projected fundamentals.
What about the couch potatoes? Common jabs on Twitter suggested that Time Warner Cable customers are about to have their monthly bills jacked up, but it doesn't have to be that way. If anything, a combined Comcast and Time Warner Cable could force cable networks and premium channels to hold back on unsustainable increases. If Comcast and Time Warner Cable pass on the savings to consumers -- and they might -- this deal could be in everyone's best interest outside of the content creators.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Tesla Motors (NASDAQ:TSLA) hit a new all-time high, but a report on Thursday claimed that another Model S sedan caught fire. What makes this one intriguing is that it happened in a Canadian garage. Tesla quickly countered that the battery charger was not at fault in the blaze.
- It's not just cable giants consolidating. Jos. A. Bank (NASDAQ: JOSB) is snapping up Eddie Bauer in a $825 million deal. The deal comes after Jos. A. Bank was at both ends of a proposed union with Men's Wearhouse.
- Now the that the fizz has settled on Coca-Cola's new 10% stake in Green Mountain Coffee Roasters (NASDAQ: GMCR), some are beginning to wonder if the Keurig company has run up too high. Longbow Research downgraded Green Mountain, concerned about the valuation and the vague nature of the Keurig Cold appliance that will hit the market sometime during the fiscal year that begins in October.
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