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Verizon Buys CBS and Viacom In 2018- Prediction #3
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There is no doubt that Netflix ($NFLX) is reshaping the media landscape in a way that is far more severe than many may have ever thought. As the company continues to drive subscriber growth, that has now eclipsed 100 million global users and spending $8 billion in original content creation, it is forcing the media giants to rethink the way they do business. It takes us to our third predictions for 2018: Verizon Takes The Plunge Into Content, Buying CBS and Viacom
Shifting Media Landscape
Netflix’s massive spend on content in 2017, has caused companies such as Disney ($DIS) to finally severe ties with the streaming media giant, forcing Disney to create its own direct to the consumer product. Also in an attempt to strengthen it’s content library, acquire assets from Fox for over $50 billion. This is likely just the start of a wave of consolidation in the media space.
Prediction #3 – Verizon Plunges Into Content Buying CBS and Viacom
Prediction 3- Could 2018 be the year Verizon ($VZ) follows AT&T ($T) lead? Perhaps. In an attempt to catch up to AT&T’s and its bid to buy Time Warner ($TWX). Verizon could throw its hat into the ring and go after CBS ($CBS) and Viacom ($VIA) in 2018. A move like this could bring CBS and Viacom back together, and put Verizon squarely in the middle of the direct to the consumer experience, riding on the backbone of its FiOS product and the rollout of its 5G wireless network. It seems crazy, for sure, and a wild prediction. It could come at a valuation equal to that of what Disney paid for Fox assets, at roughly $50 billion for both CBS and Viacom, giving a 40 percent premium to the two companies combined market caps of about $36 billion.
FOXA Market Cap data by YCharts
Anything Could Happen
There is no doubt that that media landscape is shifting very quickly, and when things move fast, anything could happen.
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10 Predictions For 2018:
10. Tesla’s Stock Price Could Nearly Double In 2018
9. US Real GDP Will Grow at 4% or More In 2018 – 10 Predictions
8. Why The FANG’s Will Lead Stocks Higher In 2018
7. Oil will rise to roughly $75 per barrel in 2018, a rise of just over 30 percent.
5. 10-Year Yields rise to 3 percent.
4. Biotech Stocks Will Be Best Performing Sector In 2018
The purpose of the 10 predictions is for fun and to think about the year to come. It helps to organize thoughts and think about potential themes and trends that could develop. See our 10 predictions for 2017 and judge for yourself how we did.Â
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Michael Kramer and the clients of Mott Capital own shares of $VZ $NFLX $DIS
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
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Tags: #verizon #netflix #predictions #2018 #cbs #viacom #streaming #media
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.